UK: Inflation continues to tumble as the pound’s plunge fades - ING

— “But we suspect at least some of this latest fall is sterling related, and we expect core inflation to hit 2% next month as the rate of pass-through from the pound’s post-Brexit plunge continues to fade.”

— “In principle, this takes some of the heat off the Bank of England to hike rates again in the near-term – although it’s worth remembering policymakers are still focussed squarely on wage growth as a measure of underlying inflation.”

— “But when it comes to the prospect of a summer rate hike, it all comes down to whether the activity data show sufficient signs of recovery before August

— Our feeling is the Bank is inclined to hike rates assuming the data shows some signs of a bounce-back

— That said, a lot still depends on the high street where lower demand, rising wage costs and higher business rates are causing severe difficulties for retailers.”