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MNI UK Inflation Insight: May 2024

We think today's CPI data cements a 7-2 vote at tomorrow's MPC meeting to keep Bank Rate unchanged at 5.25%.

Inflation InsightHomepageMarkets
  • We think today's CPI data cements a 7-2 vote at tomorrow's MPC meeting to keep Bank Rate unchanged at 5.25%.
  • Services CPI was 0.42ppt above the May MPR forecast but headline CPI was only 0.05ppt above.
  • Looking at market pricing, around 4bps of cuts were removed from August pricing (with around 7bp / 28% probability of a cut) with around 3bp of cuts removed throughout the rest of the curve with markets continuing to fully price a first cut by November.
  • We don't think that today's data has breached the bar to change guidance at tomorrow's MPC meeting - but we are close so it can by no means be completely ruled out. We think any change would be a surprise to the market, and possibly see another aggressive retightening.
  • We look at the drivers in more detail and summarise 15 sellside analyst reviews.
For the full PDF see:

MNI UK Inflation Insight - June 2024 Release.pdf

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  • We think today's CPI data cements a 7-2 vote at tomorrow's MPC meeting to keep Bank Rate unchanged at 5.25%.
  • Services CPI was 0.42ppt above the May MPR forecast but headline CPI was only 0.05ppt above.
  • Looking at market pricing, around 4bps of cuts were removed from August pricing (with around 7bp / 28% probability of a cut) with around 3bp of cuts removed throughout the rest of the curve with markets continuing to fully price a first cut by November.
  • We don't think that today's data has breached the bar to change guidance at tomorrow's MPC meeting - but we are close so it can by no means be completely ruled out. We think any change would be a surprise to the market, and possibly see another aggressive retightening.
  • We look at the drivers in more detail and summarise 15 sellside analyst reviews.
For the full PDF see:

MNI UK Inflation Insight - June 2024 Release.pdf