August 15, 2024
UK CPI dropped by 0.2% in July over the month and rose by 2.2% in June over the year demonstrating its reluctance to go lower of 2% bottom where it stuck in May. Monthly drop by 0.2% was unable to brake this upward potential as it is still under the impact of five previous months of decent rising (see chart).
The slowdown in inflation easing is rather worrisome signal for BoE which is now regarding rate cuts as the means to prevent possible recession in the economy which suffers from expensive credit.
Summary:
This uptick in yearly inflation looks quite upsetting. What if it persists in the next months?
In the case the current downward tendency in monthly CPI keeps going it will help yearly inflation to resume sliding. If not then there is a high risk for inflation to stuck in rising for some time