As we await the UK inflation data at 09.30 gmt let’s remember that the BOE has a major on-going headache.
They’ve wanted the pound lower but:
a lower pound = more expensive imports = higher prices for goods = inflation
Raising interest rates to fight inflation = more expensive borrowing costs for industry and private individual = less investment = less growth
If we see a reduced inflation number today then we must look to see whether that is a sign of weaker demand in the uk economy.
Either way the BOE and government have a problem which is not going away anytime soon.
