Jeremy Thomson Cook, Chief Economist at Equals says: “Inflation remains well below the Bank of England’s target here in the UK, running at 0.5% in May. This is no great hindrance to the UK’s economic performance but more a sign that input prices – oil and other industrial commodities – have swan-dived in recent months. Demand remains perilously weak; you don’t get inflation without demand. When inflation does starts to rise, absent some spike in commodity prices, it will be a positive thing.”
“Such low readings will eventually cause the Bank of England Governor to explain such low inflation to the Chancellor in a series of letters, but the BOE’s mandate is currently much more about providing every liquidity and support to the UK economy it can as opposed to price stability.”
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