BOE Sees Q2 headline inflation lower than in Feb forecast

The BOE raised Bank Rate 25 bps to 4.25% Thursday, with only two dissenters (Tenreyro, Dhingra) voting for unchanged rates.

• Although  the February UK inflation data surprised to the upside, the MPC highlighted that the print was 'higher than expected', but the Q2 headline prints were likely to fall significantly and lower than expected in the February Report.
• The February boost in services inflation was stated to have been broadly in line with expectations.
• The MPC also noted wage growth was likely to fall back somewhat more quickly than expected.
• Overall, the MPC was slightly more upbeat on the outlook for the UK economy compared to the time of the February report, although acknowledging risks to the financial and economic outlook have risen.