Inflation data today showed a slightly higher than forecast YoY rate at 2%, analysts were expecting a decline to 1.9% from last month’s 2% reading.
Core Inflation also remained steady at 3.5%as forecast. However, the market had been expecting proof of a decline in price increases. And a small decrease in the YoY inflation might have propped the market.
But core inflation is still well over the 2% target of the BoE, and there was no help from the broader inflation gauge. Hopes for a cut in rates at the September meeting have shrunk rapidly today.
Tomorrow we will get employment data, the market is expecting an increase in jobs of 18k after last month’s decline of 139k. An increase in jobs, which is seen as inflationary, may dampen even further any hopes for a rate cut sooner rather than later.
The stock market is more concerned about seeing interest rates lower than an expanding economy. It’s been a while now that data such…
