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Softer data won’t deter MPC

The financial markets are probably right to assume that an interest rate rise in August is still more likely than not. Somewhat counterintuitively, lower inflation might make it easier for the MPC to raise rates, as it will relieve the pressure on consumers’ incomes. And we doubt that earnings growth will continue to ease. Overall, we remain comfortable in our view that the MPC will press ahead and raise rates on 2nd August.

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