Flash: UK CPI to rise in time - Merrill Lynch and Bank of America

FXstreet.com (London) - Research teams at Merrill Lynch and Bank of America said that overall, they think there are various reasons to think that the unexpected weakness in UK CPI inflation in April will not persist over the medium term.

They continue to expect it to pick up to around 3% over the next few months; in part, as upward pressures from the depreciation in Sterling at the start of the year feed through More generally, after the BoE’s 6-3 vote again to leave QE on hold in May, it would seem prudent for them to wait and see if any potential Easter effects reverse again in May, before considering whether the recent CPI data might suggest a weaker medium-term inflation outlook compared with their May Inflation Report projections.