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2025-09-17 14:17:23
[UK inflation remains high, Bank of England expected to remain on hold on Thursday] Data released by the UK National Statistics Office on Wednesday showed that the CPI rose 3.8% year-on-year in August, maintaining its highest level since early 2024. This disturbing data may make Bank of England officials wary of further interest rate cuts. The decline in airfares that month was offset by increases in car fuel and restaurant and hotel prices, while food inflation continued to climb. Service industry inflation slowed to 4.7%, still higher than the level recognized by the Bank of England. These data highlight the dilemma facing central bank officials: although the labor market is cooling, policymakers are concerned that high price pressures are pushing up consumer inflation expectations. The Bank of England expects inflation to peak at 4% in September, double its 2% target level. The Bank of England will announce its interest rate decision on Thursday and is expected to keep the interest rate unchanged at 4%, and may pave the way for a longer pause in interest rate cuts, thus ending the quarterly rate cut rhythm maintained since August last year.
