UK inflation slowed from 6.8% annually in July to 6.7% in August.
The day before the Bank of England met to decide what to do about interest rates, better-than-expected inflation data was released.
- UK inflation slowed from 6.8% annually in July to 6.7% in August.
But the decline was greater in the case of core inflation, which excludes more volatile items and strong seasonality, which rose from 6.9% to 6.2%.
Until the inflation data was known, it was expected that the Bank of England would raise the interest rate by a quarter of a percentage point, raising it from 5.25% to 5.50%. But some analysts now doubt it will do so..
Moreover, the margins for further monetary tightening are narrow due to the contraction in economic activity in June.
In any case, the inflation rate in the United Kingdom exceeds that of other developed countries.
- In August, annual inflation in the United States reached 3.7% and in the Eurozone 5.2%.
The prospect of an end to the upward interest rate cycle has weakened the pound against the dollar. But this move should also be part of a strengthening scenario for the US currency against other currencies.
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