Inflation falls: how far will interest rates follow?

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Inflation falls: how far will interest rates follow?

Key Takeaways

  • US inflation numbers dipped last week, and although it was only a modest decline it was warmly greeted by markets

  • With inflation data due from the UK and Europe this month, there are expectations that they will follow suit

  • With the US consumer feeling less confident, we expect a softness in US consumer spending and renewed downward pressure on prices

  • The economies in Europe and the UK are growing more rapidly, but as this is off a low base it shouldn’t impact central bank intentions to cut rates

  • All in all this constitutes a favourable background for financial markets and we foresee further gains over the remainder of 2024

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20 May 2024
Steven Bell
Steven Bell
Chief Economist, EMEA
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Inflation falls: how far will interest rates follow?

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