Commenting on lower than expected inflation which dampens enthusiasm to raise rates

Commenting on lower than expected inflation which dampens the enthusiasm of the Bank of England to raise rates, Rupert Thompson, Head of Research at Kingswood, said: “UK inflation in March came in lower than expected. The core and headline measures were both unchanged at 1.8% and 1.9% respectively rather than edging higher as had been expected. The latest numbers leave inflation running just below the BofE’s 2% target and should dampen somewhat the enthusiasm to raise rates – if and when Brexit uncertainty subsides – to head off the ongoing pick up in wage growth. The BofE faces a similar conundrum to the Fed in the US – how much emphasis to put on the tightness of the labour market, which is putting wages under upward pressure, when as yet there is precious little sign of it feeding through to higher inflation.”