PREVIOUS TRADING DAY EVENTS 20 Sep 2023

U.K. Inflation finally seems to get lower significantly, raising the prospect of the Bank of England BOE pausing its long run of interest rate hikes. Will it though? The current annual level of 6.7 is still high and it was quite difficult for them to lower it to that level this year. 

Britains inflation rate peak was just above 11 last October but even after the latest drop, it remained among the highest in Western Europe, topped only by Austria and Iceland in August.

The big downside surprise to core inflation throws the Bank of England a major curveball, Chris Hare, an economist with HSBC, said. Strong wage growth in recent data meant a rate hike was still the most likely outcome on Thursday but todays data raises a risk that the MPC will remain on hold, he said.

Core inflation fell sharply to 6.2 from 6.9 in July. Service sector inflation slowed to 6.8 from 7.4.

Todays news shows the plan to deal with inflation is working plain and simple, as Finance Minister Jeremy Hunt said. But it is still too high which is why it is all the more important to stick to our plan to halve it so we can ease the pressure on families and businesses.

Source httpswww.reuters.comworldukukinflationrateunexpectedlyfalls67august20230920

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