Posted 1/27/2024, 2:00:00 PM
Inflation Plunging Faster Than Expected, Putting Bank of England Forecasts Under Scrutiny
- CPI inflation is on track to hit the Bank of England's 2% target by Spring 2024, much sooner than forecasted
- This will put pressure on Governor Andrew Bailey and the Bank to explain why their inflation forecasts were so inaccurate
- Lower energy prices are a major reason inflation is falling faster than expected
- Investors are betting on interest rate cuts starting as early as May 2023 due to the plunging inflation
- Wage growth and underlying inflation remain risks that could keep rates higher for longer if the Bank pulls back too soon