What's going on?
The UK: inflation It was the first time in three years that they had achieved the target result, earning the country major bragging rights over Europe and the United States.
What does this mean?
UK inflation came in at 2% in May, marking an important milestone in the fight against the sharpest price rises in a generation. But the fight is not over yet. Core inflation, which excludes volatile food and energy prices, remains well above target at 3.5%. Services inflation is also stubbornly stubborn, improving only slightly last month. So while this headline figure suggests the Bank of England is on track for 2020, interest The central bank is unlikely to rush into cutting rates, even if it does do so this year, which is why traders are not unanimously expecting the first cut until November and why they are not expecting a cut in 16-year highs when the central bank next issues interest rates on Thursday.
Source: UK Office for National Statistics
Why should you care?
For markets: The hare and the turtle.
A British victory would put the UK ahead of US and eurozone calming efforts. inflationIt's an underdog story. UK inflation recorded the highest and slowest decline of the three countries, so it looked like the UK would be stuck in the mire for the longest time. But then inflation started to fall in the UK while the others stayed the same. It's hard to pinpoint the exact reasons, but aggressive interest rate hikes, an effective energy price cap, and a stable currency would surely have all helped.
Source: UK Office for National Statistics
Overall picture: Victory is defeat in disguise.
But even 2% inflation That means prices are still rising – in fact, Britons are now facing prices more than 20% higher than they were in 2020 – and unless the country's bosses suddenly and en masse do something good and raise wages enough to offset the rise in prices, many households will continue to feel the strain.
