UK inflation has remained steady easing fears that the Bank of England could hike interest rates up for the first time in 10 years.
Consumer price inflation rose 2.6% last month, unchanged from June but below the 2.7% many analysts were forecasting. (source: Office for National Statistics)
The lower than expected inflation rate suggests the Bank is unlikely to raise interest rates in the near future.
We don’t believe the Bank of England will raise interest rates this year, the likelihood is we won’t see a rate rise until late on in 2018. Depending on how the Brexit negotiations progress and whether or not an agreement on a Brexit transition period is agreed, we could even see the base rate remain at 0.25% going in to 2019.