UK Inflation Steady, Dimming Hopes for August Rate Cut

Despite inflation returning to target levels, the Bank of England remains cautious about cutting interest rates due to persistent inflationary pressures in the services sector. While goods prices are in deflation, services inflation, particularly in restaurants, cafes, rents, and hotels, remains high. This has led to a reduced likelihood of a rate cut at the next policy meeting, with financial markets adjusting expectations accordingly.