Market Outlook: HSBC Expects UK Inflation to Decline Again by 2025

Forex - HSBC expects inflation in the UK to decline again as 2025 progresses. In a note written by HSBC economist Chris Hare, it was noted that annual price increases accelerated for two consecutive months, pushing inflation above the Bank of England's (BoE) target of 2% to 2.6%. The economist stated, "However, much of this can be attributed to base effects from the same period a year ago, and underlying inflation shows signs of moderation." Hare commented, "As long as the core momentum remains at this level, we should see a softening in the spring and beyond," suggesting that this should allow the BoE to reduce interest rates from the current 4.75% to as low as 3.00% by early next year.