Tempered Bets

The last mile in the inflation battle was always going to be hard. In the UK, the most recent data revealed a continued, albeit slow, decline in inflation. Meanwhile the latest three months of US price pressures surpassed expectations. In response to that, market pricing around rate cuts have been pushed back. However, other indicators point to disinflation: the labour market is loosening, supply chain disruptions and producer price pressures are easing.