The CPI declined sharply in July, from 2.4 per cent the previous month, to 1.9 per cent, meeting the Bank of England’s target of 2 per cent inflation.
Meanwhile the turbulence in global markets has seen stocks fluctuate on a daily basis and caused a number of companies to evaluate their positions.
This has lead to economists readjusting their thinking as to when, or if, another rise might occur.
Howard Archer, chief UK economist at Global Insight, said: “The figures will undoubtedly take the wind out of the sails of the hawks on the Monetary Policy Committee (MPC), and will boost expectations that rates have peaked at 5.75 per cent, especially as the turmoil in global credit and financial markets further dilutes the case for higher rates for now at least.”
Andrew Gall, business economist at the Building Societies Association, added: “
With the data that has come out, it looks like the MPC will hold over August and September. Further action will depend on the data.”
