WisdomTree: Inflation tumbles as consumers’ debt-fuelled spending undermined
Reacting to the fall in headline inflation in the UK which has seen the Consumer Prices Index inflation rate fall to 2.6% in June, Nick Leung, research analyst at WisdomTree in Europe, said:
“Today’s inflation reading is slightly softer than expected, underpinned by a combination of oil price weakness, a stabilising pound and import-cost induced inflationary pressures undermining consumers’ debt-fuelled spending power.
“The latter in particular will likely encourage the BoE to delay the rate hike cycle for as long as possible, especially against a backdrop of weakening business sentiment and absent wage increases further eroding UK consumer spending.
“Alongside a divided UK cabinet that is yet to adopt a coherent Brexit strategy, ongoing political uncertainty will continue driving volatility in the pound and UK inflation over coming months.”