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June rate cut unlikely following underwhelming drop in inflation, ICAEW says

Author: ICAEW

Published: 22 May 2024

Suren Thiru, ICAEW Economics Director, responded to the UK inflation figures for April 2024, released by the Office for National Statistics today (Wednesday 22 May 2024):

“This underwhelming drop in inflation suggests that the UK is rather stumbling back towards the Bank of England’s 2% target, as lower energy bills had a smaller than expected impact on April’s headline rate.

“Concern over hotter than expected headline inflation is exacerbated by disappointing declines in core and services inflation, which suggest that the problem of underlying price pressures embedded in the wider economy have yet to be solved.

“The headline rate is set to drop markedly over the summer, once the expected decline in Ofgem’s energy price cap cuts people’s energy bills from July.

“Lingering concerns over underlying inflationary pressures mean a June rate cut is unlikely. However, these figures may convince more rate setters to vote to ease policy, providing a signal that a summer rate cut is still possible.”


Notes to editors:

Contact: ICAEW media office media.office@icaew.com, tom.mackintosh@icaew.com or 07866 853 841