Falling inflation fails to shift experts on rate cut

CITY experts stuck with predictions that tomorrow is still too early for a Bank of England interest rate cut, even as the rate of inflation fell at its fastest pace in 50 years today.

- Michael Hunter

That slide put the BoE’s official 2% target within reach, according to respected forecasters.

Economists at ING predicted that the headline consumer price index inflation will “be below 2% from May and for much of 2024”.

Official data confirmed CPI hit 3.4% for February, down from 4% the month before, to a two-year low. It had been forecast to read 3.5%. The fall was the first since November after an unexpected rise in December and a steady showing in January.

James Smith, developed market economist at Dutch bank ING, pointed to one component of the data : “Producer prices for food have either been flat or slightly negative for a while now and that’s feeding through to consumers very noticeably”.