I doubt it really, I doubt it

Falling petrol prices are keeping a lid on inflation, and economists believe that means Mark Carney at the Bank of England is less likely to put up interest rates.

Consumer prices rose by 2.6pc in the 12 months to July, the Office for National Statistics (ONS) said, the same rate as in June because falling petrol prices offset rising food and clothing costs to keep inflation steady.

I strongly suspect that the BoE, like The Federal Reserve and even the ECB, looks at core inflation rates. That is, inflation minus the known to be highly volatile fuel and food sectors.

3 thoughts on “I doubt it really, I doubt it”

  1. Wage inflation just hit 2.1%, that’s one reason to raise rates.

    Mind you, with an inflation target of 2% and a productivity target of anything above 0%, wage inflation of just 2.1% certainly doesn’t suggest an overheating economy.

  2. The BBC and others were talking inflation up before the figures came out – presumably as part of the “we’re all going to hell in a handcart because of Brexit” project – successor to the unlamented project fear.
    The pound fell more than 13 months ago now, so future inflation will likely be lower, not higher.

  3. back in the 1980s on the bond floor the standard joke about the monthly release of inflation figures quoted “ex food’n’energy” was

    “yep, so as long as you dont eat & you dont drive, everything is fine”

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