Anticipating the impact of December's CPI on economic policy

As the UK prepares to release its December inflation figures, expectations are set for a 3.8% rise in the Consumer Prices Index (CPI), nearly double the Bank of England's 2% target. This follows a peak of 11.1% in October 2022 and a decline to 3.9% in November 2023. The Bank of England remains cautious, indicating that monetary policy will need to stay restrictive for a prolonged period to sustainably return inflation to the 2% target. Investors should be aware that a surprise uptick in inflation could delay anticipated interest rate cuts, as the Bank seeks to ensure inflation is fully controlled...