2% UK Headline Inflation Doesn't Equal BOE Rate Cut

Governing Council began its deliberations by reviewing recent data on the global economy since the April Monetary Policy Report. Global growth improved modestly to about 3% in the first quarter of the year, broadly in line with expectations. US growth slowed, while growth in the euro area and China picked up. The US economy was weaker than expected, largely due to drag from exports and inventories. Consumption growth and business investment were both solid but had slowed. US inflation had proven sticky in recent months, but Governing Council members continued to expect that it would gradually ease. In contrast, growth in China increased after unevenness in 2023, and growth in the euro area resumed after stalling in the second half of 2023. The pickup in China’s economy was mostly due to foreign demand boosting exports, while domestic demand remained subdued. Economic activity increased modestly in the euro area driven mainly by an increase in demand for services. Members noted that while headline inflation was below 3% in both the United States and euro area, three-month measures of core inflation had picked up in both regions relative to the beginning of the year, reversing earlier downward momentum. Although inflation was expected to continue to ease gradually, progress toward central bank targets could be bumpy. Oil prices had initially risen above levels assumed in the April Report because of global conce post: BOC MINUTES: WHILE MEMBERS RECOGNIZED THE RISK THAT PROGRESS ON INFLATION COULD STALL, THERE WAS CONSENSUS INDICATORS SHOWED ENOUGH PROGRESS TO WARRANT A CUT. post: BoC Members Agreed Reasonable To Expect More Cuts If Progress Continues, Policy Easing Likely To Be Gradual - Minutes - Agreed Policy 'Not Close' To Limit Of Divergence From Fed - Members Considered Waiting Until July To Cut Rates - Four Months Of Core CPI Easing Warranted June…