July UK inflation data expected to rise to 2.9% annually, influencing Bank of England rate cut expectations for late 2024.
UK headline inflation is forecast to rebound to 2.9% in July from June’s 2.6%, driven by higher energy prices and the Ofgem price cap adjustment. Core inflation is expected to ease slightly to 2.5%, aligning closely with the Bank of England’s 2.55% projection for the quarter.
The data follows yesterday’s labor market figures, which held less weight for traders. Services inflation is anticipated to remain sticky but decline to 3.4% from 3.6% in June, with base effects and government policies potentially dampening price pressures in recreation and air fares.
Markets will scrutinize the report for clues on the BOE’s policy trajectory, as stronger inflation could delay rate cuts in the final months of the year.