London — The UK inflation remained at the 2% target for the second consecutive month in June 2024, driven by wage growth and services inflation. Influencers on “X” platform opine that despite strong economic growth in the UK, elevated wage growth is sustaining persistently high inflation.
As a result, the high services inflation has raised doubts among influencers regarding the Bank of England’s (BoE) decision in August 2024, reveals the Social Media Analytics Platform of GlobalData, a leading data and analytics company.
Smitarani Tripathy, Social Media Analyst at GlobalData, comments: “Influencers are divided on whether the Bank of England should act immediately on inflation or adopt a wait-and-watch approach. Some emphasize the need for consistent monetary policy to address high inflation, while others advocate caution due to a flourishing economy. The prevailing view is that the BoE will maintain the current interest rate at the upcoming August meeting. Despite robust economic expansion, the rising wage costs in a tight labor market are fueling high inflation. Concerns are growing that delaying rate hikes could lead to a sharper economic slowdown in the future.”
A few popular influencer opinions captured by GlobalData’s Social Media Analytics Platform indicates varied positions.
Andrew Sentence, Business Economist: “An alternative measure of UK “core” inflation is CPI exc energy and unprocessed food. In June this measure showed 3.6 percent inflation – same as May. More evidence that inflation exc energy is stuck significantly above target.”
Shane Oliver, Head of Inv Strategy & Chief Economist, AMP: “UK June CPI inflation came in slightly higher than expected at 2%yoy (mkt exp was 1.9%) with core inflation unchanged at 3.5%yoy and services unchanged at 5.7%yoy. Likely makes Aug a bit too early for a BoE cut (mkt has 58% probability) with Sept more likely.”
Bob Elliot, CEO & CIO at Unlimited: “The UK is experiencing an uptick in growth and stubbornly high inflation driven by elevated wage growth. Not the time to start easing and another sign of caution for DW central bankers. Core CPI stabilizing around 3.5%, way over the BoE mandate.”
Alex Wickham, Political Editor at Bloomberg UK: “UK inflation held steady at the 2% target for a second straight month (economists had expected 1.9%) But stubborn price pressures in the services sector added to doubts over whether the BOE will cut interest rates next month.”
Faisal Islam, Economic Editor at BBC: “Bit of a gap opening up between the Bank of England’s target measure of inflation (2%) and the ONS’ which included housing costs (2.8%) on that wider measure, services inflation edged UP to 6%.”
