View more on these topics

Inflation figures cast doubt over interest rate rise

Inflation stayed put at 2.4 per cent in June, bucking against an expectation it would rise to 2.6 per cent.

Data from the Office for National Statistics released today show inflation will remain at its lowest level for 12 months.

Smith & Williamson Global Inflation-Linked Bond Fund manager Thomas Wells says the Bank of England will now find it hard to increase interest rates when its committee next meets on 2 August.

In June, the Bank of England’s Monetary Policy Committee voted to keep interest rates on hold at 0.5 per cent but with an increased number of members calling for a rate rise.

Wells says: “This was a below consensus inflation print and fits with our view that CPI would start to be better behaved as we move into the second half of the year. However, RPI remains elevated at 3.4 per cent.”

He adds: “The large Brexit-driven surge in inflation due to the slump in the value of the pound is now finally beginning to wash out of the system. Core inflation was significantly weaker than expected at 1.9 per cent year-on-year, which will make it more difficult for the Bank of England to raise rates, particularly given a backdrop of Brexit and trade uncertainty.

Wage inflation figures were also released this week showing average weekly wages grew by 2.5 per cent on the year over the past three months.

AJ Bell personal finance analyst Laura Suter says: “Both these figures together will make for tougher reading for the Bank of England’s rate setting committee when they meet next month, with some predicting the figures mean that a mooted interest rate rise will be put on the back burner.”



FCA mulls exit fee ban for platform switches

The FCA is considering banning exit fees for switching platforms. In its platform market study, released this morning, the FCA says it may also issue further guidance on how advisers should charge for platform switches after finding that the process and the costs involved can often be lengthy, preventing clients from getting the best deal […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm