Aberdeen: UK inflation slightly stronger than expected
Felix Feather, economist at Aberdeen Investments, comments on the British inflation figures released this morning:
“UK inflation was slightly stronger than expected in May, with the headline rate falling from 3.5% to 3.4%, versus consensus expectations of 3.3%.
The upside surprise confirms that the Bank of England will be on hold tomorrow.
However, policymakers will take a little comfort from the downside surprise in services inflation, which dropped to 4.7% from 5.4%, slightly behind expectations for a 4.8% outturn.
We are sticking with our call for the Bank to continue to reduce rates at a quarterly cadence. But geopolitical uncertainty and risks from US trade policy raise both upside and downside risks to this forecast.”
