Despite a small decrease in inflation, the Bank of England is considering another increase in the base rate. The inflation rate dropped to 2.8per cent in April, as a result in the falling gases and electricity prices.
However, the concern is where inflation will be once the electricity and gas prices have settled down, as this will give us a more accurate picture of inflation.
Our view
The Bank of England’s Monetary Policy Committee only really has one job and that is to control inflation. It is therefore committed to controlling inflation and will do whatever it needs to, to reduce inflation. We believe that another rate increase is a foregone conclusion in either July or August.