Our forecast that CPI inflation will fall from 3.2% in March to below 2.0% in April and below 1.0% later this year would leave inflation much lower than the Bank of England and the consensus forecasts and lower than in the US and the euro-zone. This underpins our forecast that the Bank will cut interest rates from 5.25% now to 3.00% next year, rather than to 3.75% as investors expect.
We’ll be discussing the outlook for UK inflation and interest rates in a 20-minute online briefing at 9.30am BST on 22nd May shortly after the release of April's CPI data, which we think will show inflation fell below the 2% target for the first time in three years. (Register here.)
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