BOE may cut rates before the Fed as UK inflation creeps closer to 3%
Bank of England governor struck a different tone Tuesday, noting a ‘divergence’ between the US economy and those in Europe
UK inflation slowed less than expected last month as fuel prices crept higher, underscoring the reluctance of central bankers to begin cutting interest rates.
Consumer prices rose 3.2 per cent in March compared with a year earlier, down from 3.4 per cent in February, the UK’s Office for National Statistics said Wednesday. While it was the lowest since September 2021, the BOE and private-sector economists had expected a reading of 3.1 per cent.
Britain had the worst inflation problem in the Group of Seven nations last year but has brought down the pace of price increases sharply from 11 per cent in late 2022. While Andrew Bailey, the Bank of England governor, and his colleagues expect it to drop to the 2 per cent target later this year, they’re looking for more firm evidence that those pressures will subside before acting.
