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UK Inflation Hits 2% Target, Bank of England Maintains Interest Rates
TOPICSTags: BoE, British Pound Sterling, FTSE100, GBPUSD
In May, the annual rate of inflation in the United Kingdom dropped to the 2% level that the central bank aims for, meeting the expectations of financial analysts. Additionally, the core inflation rate, which removes the volatile food and energy prices to give a clearer view of inflationary trends, decreased from 3.9% to 3.5%, aligning with what was projected by experts. Despite these decreases, the inflation rate for services – which includes costs related to things like housing services, health care, and transportation – only dipped slightly to 5.7% from 5.9%. This was a smaller reduction than financial analysts had hoped for, as they had forecasted a decrease to 5.5%.
In its June 2024 meeting, the Bank of England’s Monetary Policy Committee (MPC) voted to keep the Bank Rate steady at 5.25%. The decision was in line with market expectations and reflects the central bank’s ongoing efforts to balance economic growth with inflation control.
The FTSE 100 rose 0.82% on Thursday, buoyed by anticipation of future Bank of England rate cuts. Concurrently, sterling dipped under $1.27.
(FTSE 100 Index Six-month Chart)
(GBP/USD Weekly Chart)
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