With services inflation still elevated at 4.7%, the small fall in CPI inflation from 3.5% in April to 3.4% in May (CE 3.2%, consensus 3.4%) won’t prompt the Bank of England to deviate from its recent quarterly rate cutting path. The Bank looks nailed on to keep rates unchanged at 4.25% tomorrow (see here) and we expect the next 25 basis point (bps) rate cut in August.
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