Limited pricing power conducive of short-lived inflation hump

The combination of limited corporate pricing power, due to the weak economic backdrop, and the softening labour market supports our view that the inevitable jump in CPI inflation in the coming months won't morph into a sustained rise that requires the Bank of England to raise interest rates from their current level of 3.75%. We think market pricing of rate hikes to 4.25-4.50% have gone too far, outside of our adverse scenario at least.