The cost of services, a key metric that is closely watched by the Bank of England, however, slightly missed analysts’ expectations, coming in at 5.7 percent on the year versus market expectations of 5.5 percent.
The Bank’s Monetary Policy Committee will meet on Thursday, where, due to the proximity of the upcoming election, it is all but certain to keep rates unchanged at 5.25 percent in order to not influence the political outcome.
Pandemic-era dislocations brought inflation to the highest in decades, peaking at 11.1 percent in October 2022. It has been above the Bank’s 2 percent target for over three years now.
The state of the U.K. economy has been a central issue for the Conservative and Labour parties in advance of the July 4 election.
This latest figure paves the way for the Monetary Policy Committee to cut rates in August.
If the polls are correct, the Labour Party will be in Number 10 by then.
