Dubai Telegraph - UK inflation slowdown unlikely to shift vote, rate outcomes

EUR -
AED 3.864558
AFN 70.494102
ALL 97.271059
AMD 407.155517
ANG 1.896104
AOA 960.613091
ARS 1056.248038
AUD 1.631278
AWG 1.8965
AZN 1.791206
BAM 1.954184
BBD 2.124143
BDT 125.716025
BGN 1.949289
BHD 0.396502
BIF 3048.60406
BMD 1.05215
BND 1.415816
BOB 7.269126
BRL 6.090159
BSD 1.05203
BTN 88.793862
BWP 14.440919
BYN 3.442853
BYR 20622.13618
BZD 2.120586
CAD 1.47947
CDF 3015.461382
CHF 0.937518
CLF 0.037193
CLP 1026.277825
CNY 7.607358
CNH 7.633568
COP 4716.787576
CRC 537.355573
CUC 1.05215
CUP 27.88197
CVE 110.363712
CZK 25.291264
DJF 186.988154
DKK 7.458676
DOP 63.602651
DZD 140.588561
EGP 52.233238
ERN 15.782247
ETB 128.283337
FJD 2.393671
FKP 0.83048
GBP 0.831162
GEL 2.867092
GGP 0.83048
GHS 16.887178
GIP 0.83048
GMD 74.702778
GNF 9081.104686
GTQ 8.124589
GYD 220.093785
HKD 8.187341
HNL 26.387556
HRK 7.505257
HTG 138.234358
HUF 406.601144
IDR 16790.574842
ILS 3.937918
IMP 0.83048
INR 88.885401
IQD 1378.84232
IRR 44300.767226
ISK 145.690973
JEP 0.83048
JMD 166.542259
JOD 0.746077
JPY 164.475189
KES 136.255597
KGS 90.881018
KHR 4262.25889
KMF 490.83124
KPW 946.934426
KRW 1480.916654
KWD 0.323452
KYD 0.876658
KZT 521.56863
LAK 23089.427195
LBP 94272.622526
LKR 307.355797
LRD 193.70505
LSL 19.147959
LTL 3.106725
LVL 0.636435
LYD 5.134208
MAD 10.492567
MDL 19.056877
MGA 4903.018084
MKD 61.274857
MMK 3417.341525
MNT 3575.204981
MOP 8.433465
MRU 42.049169
MUR 49.650906
MVR 16.266333
MWK 1825.479971
MXN 21.508788
MYR 4.715726
MZN 67.179687
NAD 19.147075
NGN 1767.569779
NIO 38.677193
NOK 11.743833
NPR 142.075896
NZD 1.79987
OMR 0.4051
PAB 1.05205
PEN 4.002903
PGK 4.147838
PHP 61.975307
PKR 292.604659
PLN 4.320964
PYG 8216.204675
QAR 3.830614
RON 4.9753
RSD 116.403513
RUB 104.831166
RWF 1439.340933
SAR 3.951908
SBD 8.820576
SCR 15.513945
SDG 632.870058
SEK 11.582286
SGD 1.41671
SHP 0.83048
SLE 23.881015
SLL 22063.060321
SOS 601.301259
SRD 37.200331
STD 21777.376683
SVC 9.205387
SYP 2643.557801
SZL 19.154703
THB 36.838902
TJS 11.214312
TMT 3.682524
TND 3.316347
TOP 2.464243
TRY 36.140494
TTD 7.143092
TWD 34.320603
TZS 2798.718783
UAH 43.369431
UGX 3860.806867
USD 1.05215
UYU 44.693036
UZS 13467.517223
VES 47.823448
VND 26724.605049
VUV 124.913339
WST 2.937172
XAF 655.402482
XAG 0.034478
XAU 0.00041
XCD 2.843488
XDR 0.792537
XOF 652.851937
XPF 119.331742
YER 262.879515
ZAR 19.237481
ZMK 9470.611478
ZMW 28.851686
ZWL 338.791808
  • RBGPF

    -0.9400

    59.25

    -1.59%

  • BCC

    -2.2000

    140.35

    -1.57%

  • CMSC

    -0.0600

    24.55

    -0.24%

  • CMSD

    -0.0050

    24.725

    -0.02%

  • RELX

    -0.1700

    45.95

    -0.37%

  • BCE

    -0.3700

    26.84

    -1.38%

  • GSK

    -0.7200

    34.39

    -2.09%

  • SCS

    -0.1000

    13.27

    -0.75%

  • RIO

    -0.1900

    60.43

    -0.31%

  • NGG

    0.2500

    62.37

    +0.4%

  • JRI

    -0.0300

    13.21

    -0.23%

  • RYCEF

    -0.3200

    6.79

    -4.71%

  • BTI

    0.0700

    35.49

    +0.2%

  • AZN

    -0.2500

    65.04

    -0.38%

  • VOD

    -0.0700

    8.68

    -0.81%

  • BP

    0.4800

    29.05

    +1.65%

UK inflation slowdown unlikely to shift vote, rate outcomes
UK inflation slowdown unlikely to shift vote, rate outcomes / Photo: JUSTIN TALLIS - AFP/File

UK inflation slowdown unlikely to shift vote, rate outcomes

Britain's inflation rate has slowed to a near three-year low, official data showed Wednesday, but the boost for embattled Prime Minister Rishi Sunak was unlikely to prevent his Conservatives from losing the upcoming general election to Labour, analysts said.

Text size:

The Consumer Prices Index decelerated to 2.0 percent in May from 2.3 percent in April, the Office for National Statistics said in a statement citing easing growth in food prices.

UK inflation last stood at the Bank of England's 2.0-percent target in July 2021, before rocketing higher in a cost-of-living crisis fuelled largely by soaring energy and food bills.

The BoE will announce its latest monetary policy decision on Thursday but is expected to stand pat on interest rates, as is customary so close to a UK general election.

Irrespective of the election, analysts added that the central bank would likely hold fire with prices still rising on top of sharp increases seen in recent years.

It comes as shoppers remain plagued by shrinkflation where companies slash the size of products yet charge the same or even more.

- Vote outcome? -

Wednesday's data was unlikely to move the dial on Sunak's struggling election campaign in the runup to the July 4 vote, analysts remarked.

"Today's inflation data will be no doubt welcomed by Sunak, who will use this as evidence that the Tory plan on the economy is working as we approach July's election," noted Matthew Ryan, head of market strategy at global financial services firm Ebury.

"Whether the news will make any real difference appears unlikely, with the Conservatives appearing on course for their worst election performance since the party was founded in the 1830s."

The main opposition Labour has consistently led Sunak's Conservatives by around 20 points in opinion polls for nearly two years, suggesting its leader Keir Starmer will become the next prime minister.

May's inflation slowdown "will no doubt cause delight within the Conservative Party... not that current polling suggests the outcome of the election on 4 July can be materially different than a large Labour victory", noted Nomura economist George Buckley in a research note.

Sunak hailed the inflation slowdown, but Labour slammed the Conservatives' stewardship of the economy after 14 years in power.

"It's very good news, because the last few years have been really tough for everybody," Sunak told LBC radio.

"Inflation is back to target, and that means people will start to feel the benefits and ease some of the burdens on the cost of living, and it's because of that economic stability that we've restored."

- 'Worse off' -

After peaking at 11.1 percent in October 2022, consumer price growth has cooled following a series of interest-rate hikes by the UK central bank.

Britain's economy, however, stagnated in April after emerging from recession in the first quarter of the year, data showed last week, as businesses and households weathered the cost-of-living crunch.

"After 14 years of economic chaos under the Conservatives, working people are worse off," Labour's finance spokesperson Rachel Reeves said Wednesday.

"Prices have risen in the shops, mortgage bills are higher and taxes are at a 70-year high. Labour has a plan to make people better off bringing stability back to our economy."

The BoE began a series of rate hikes in late 2021 to combat inflation, which rose after countries emerged from Covid lockdowns and accelerated after the invasion of Ukraine by key oil and gas producer Russia.

The institution last month held its main interest rate at a 16-year high of 5.25 percent but hinted at a summer reduction owing to cooler UK inflation.

Elevated interest rates have worsened the cost-of-living squeeze because they increase the cost of borrowing, thereby cutting disposable incomes and crimping economic activity.

"Today's data are unlikely to spur a surprise rate cut tomorrow, however, the (bank) could have sufficient evidence to begin its easing cycle in August," said KPMG UK chief economist Yael Selfin.

D.Farook--DT