The UK's annual inflation rate remained unchanged at 2% in June, hitting the government's target for the second consecutive month. The Bank of England is considering rate cuts amidst concerns over rising energy prices and other factors that could keep inflation high.
Financial markets now see lower chances of a rate cut at the Bank of England's next meeting, with the pound strengthening to a one-year high against the dollar. Economists are divided on whether the Bank should prioritize economic concerns or inflation risks.
Fed Chair Powell has hinted at upcoming rate cuts in the US, with traders betting on at least two cuts by the end of 2024. However, the Fed is expected to hold rates steady at its July meeting.
The inflation figures in the UK will be the last data the Bank of England sees before deciding on a potential rate cut on August 1. The decision will be influenced by upcoming wage data and the ongoing stickiness of services inflation.
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