Brief by Shorts91 NewsDesk / 10:11am on 21 May 2025,Wednesday International
UK inflation surged to 3.5% in April 2025, up from 2.6% in March, marking the highest rate since January 2024. The unexpected rise, driven by a 27.5% increase in airfares during Easter, exceeded the Bank of England's 3.4% forecast and economists' 3.3% prediction. Services inflation climbed to 5.4%, intensifying concerns over domestic price pressures. Finance Minister Rachel Reeves expressed disappointment, emphasizing the need to alleviate cost-of-living challenges. The data has led investors to reassess the likelihood of imminent interest rate cuts, reducing the probability of an August cut from 60% to 40%. Sterling experienced slight gains following the announcement. Analysts suggest the Bank of England may delay further rate reductions pending future inflation and labor market developments. (PC: Reuters)
