UK inflation data won’t prevent August easing

On Tuesday, European equity markets are about to start a bit lower, ahead of the release of the latest inflation data from Great Britain.

Core Britain’s inflation has been running well below the BoE’s target of about 2% for two years now. In fact, that’s something the number one UK financial institution has been willing to accept because the labor market was tightening, the national economy was recovering, while inflationary pressures were expected to head north. Apparently, the result on June 23 has affected the economic recovery in Great Britain, which is likely to justify further monetary stimulus, perhaps next month.

In a way, it makes today’s CPI issue almost irrelevant as , no matter what the number is, the major bank will act on the expected economic impact of the vote to abandon the European Union. Only a sharp surge in the number of could urge the major bank to reassess its options, though even then it has demonstrated its willingness to tolerate short-term periods of relatively high inflation to back up the economy.



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