At its meeting on June 20th the Bank of England took a decision to keep the key rate unchanged. Many had expected the first cut, though, as the day earlier the UK headline inflation came in at the 2% level for the first time since pandemic.
Despite that, the situation with the core inflation is not so bright:
Figure 1
Moreover, the monthly readings of the core CPI grew this year. The UK core inflation bears clear signs of seasonality. As Figure 2 demonstrates, some cooling off is typical of the April core readings after a seasonal spike in February—March:
Figure 2
However, in the current year the April reading happened to be quite high and broke the typical inflation seasonality. It is better than in 2023, but still higher than before the pandemic.