UK inflation meets target, Middle East conflict could disrupt central bank plans.

Data from the UK National Statistics Office on Wednesday showed that the Consumer Price Index rose by 3.4% year-on-year in May, in line with the central bank's forecast. The widely watched service sector inflation rate decreased from 5.4% to 4.7%, matching the central bank's expectations, and this data is considered a key indicator of domestic price pressures. Richard Hayes, Acting Chief Economist at the UK National Statistics Office, pointed out that while airfares and fuel prices have fallen, they have been offset by rising food prices - items such as chocolate, meat, as well as furniture and household goods like refrigerators and vacuum cleaners have seen price increases. Following the release of the data, the pound continued to rise, and as of Tuesday, the market had almost fully priced in two more 25 basis point interest rate cuts by the Bank of England this year. The conflict between Israel and Iran could further complicate the Bank of England's future decision-making - oil prices have risen by approximately 14% compared to a week ago. Although investors and economists believe the likelihood of an interest rate cut by the central bank on Thursday is extremely low, there may still be room for further action at the August meeting.