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“Noflation” unlikely to prompt rate cut

We think that the deflation likely to be seen in the coming months will of the “good” sort, lasting only a short while and boosting households’ spending power. So we doubt that a rate cut – as floated by MPC member Andy Haldane – will be seen. That said, a rate rise seems unlikely until the Committee is sure that deflation is not becoming entrenched, which may take several months.


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