Oil Plunge and Stronger Pound Set to Dampen UK Inflation Surge
A resurgence in UK inflation that has kept the Bank of England nervous about cutting interest rates is set to be curbed by energy prices and the dollar tumbling in response to US President Donald Trump's trade war.
Bloomberg Economics' in-house model SHOK shows that weaker oil prices and a stronger pound could dampen inflation by an average of 0.4 percentage points over the next year. SHOK broadly matches the key dynamics of the BOE's own model.
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