Inflation falls, but remains elevated
15th July 2010
Inflation falls, but remains elevated
After notching a 17-month high in April at 3.7%, we have seen inflation in the UK fall for two consecutive months down to 3.2% helped by lower prices in petrol and clothing. This has taken some pressure off the Bank of England MPC members whose central view has been that inflation in the months ahead will start to drop lower towards their target level at 2%. Time will now tell whether the sole dissenter Andrew Sentance will join the central view and stop calling for rate hikes, or he is joined by other MPC members fearing that inflation will get out of control unless addressed.