Janus Henderson: Mitul Patel zu den Inflationszahlen in England

“Inflation in the UK reached a 5 year high today, with CPI coming in at 3%. We expect inflation to plateau at these levels, before lowering over the course of the next year, as the impact of the falls in sterling begin to fade. 

“Wage growth has failed to keep pace with consumer prices, we have experienced a softening in consumption and weaker growth, so as inflation begins to fall we should expect to see consumption stabilise. 

“Much depends on how the Brexit negotiations progress from here. If talks break down, we could see sterling depreciate further from here, which would place renewed upwards pressure on inflation. However if the UK and Europe agree on a transitional deal, we could quickly see sterling strengthen back and inflation softening much more rapidly. 

“Many believe the Bank of England are only sounding hawkish as a result of inflation being temporarily high, as inflation weakens this will lessen the chance of future rate hikes. 

“This is an inaccurate reflection of their stance. They believe the diminished level of slack in the UK economy, evidenced by continued declines in the unemployment rate will lead domestically generated inflationary pressures. A hike in November continues to look likely.”