Ahead of Wednesday’s CPI figures, Steve Matthews, Investment Director, Liquidity at Canada Life Asset Management has commented.
He said: “We expect tomorrow’s Consumer Price Index (CPI) to increase to 2.3%, as fuel numbers fall out of the calculations. However, it’s not panic stations for the Bank of England following the cut in the base rate announced two weeks ago, as wage data continues to fall and unemployment remains above recent lows.
“The Monetary Policy Committee (MPC) have indicated that they fully expect bumps in the road along the way and, although this data will be a cause for wariness, it shouldn’t deter them from cutting borrowing costs in the near future.
“With a finely balanced decision to cut the base rate in August and with Governor Bailey’s subsequent cautious comments, we expect a pause in the rate-cutting cycle for now. It is most likely that any further movement would be delayed until the MPC can take on board the Chancellor’s first Budget at the end of October.”
