Core inflation figures 'final nail in the coffin' for hopes of June BoE rate cut

'Sticky' core inflation ongoing

Despite UK inflation meeting the Bank of England’s 2% target for the first time in three years earlier today (19 June), higher than expected prices for services have led investors to dial back on expectations for an interest rate cut tomorrow.

The Bank's Monetary Policy Committee is set to meet on Thursday (20 June) to decide the next step in the UK's interest rates path and is widely expected to continuing holding rates at 5.25%. While inflation saw an overall decline, core inflation, the measure that strips out more volatile components, remains high at 3.5%. Underlying areas such as services and home ownership costs were "unlikely to fall away anytime soon", however, according to Michael Field, European market strategist at Morningstar. UK inflation returns to 2% target but June BoE cut remains unlikely He argued to...