Brexit Likely to Boost UK Inflation, Keep BoE Cautious on Rates

Inflation in Britain has been stuck below the official target of 2% since January 2014 and even dipped into deflationary territory on three occasions over the course of 2015. The largest downward pressured has come from sharp drops in oil and food prices. The pass-through effect on inflation from sterling’s 2013 strong appreciation has also fueled notable disinflationary pressures. But sterling's foreign exchange rate reversed the trend in late 2014 and its depreciation has been accelerating even more since late 2015, mainly on the back of mounting Brexit concerns and the monetary divergence seen between the Bank of England (BoE) and ...READ MORE