Dutch International: Higher-than-expected inflation data should not rule out the possibility of the Bank of England cutting interest rates in August.

Analyst Francesco Pesole of the Netherlands International Group stated in a report that UK inflation data for April was higher than expected, but the possibility of a rate cut by the Bank of England in August should not be ruled out. The overall inflation rate in the UK for April rose from 2.6% in March to 3.5%, higher than the 3.4% widely predicted by economists in surveys. "Considering the distortions related to taxes, this does not seem enough to overlook the possibility of a rate cut in August, as potential improvements in service sector inflation trends are still ongoing," he said, noting that the surge in service sector inflation largely reflects one-off factors. Following the data release, the UK money market did not fully price in expectations of a rate cut until November. LSEG's data shows that they consider the possibility of a rate cut in June to be low, with only a 43% chance of a rate cut in August.