18 April | Other

Stronger pound and lower energy prices to curb inflation in the UK — Bloomberg

Stronger pound and lower energy prices to curb inflation in the UK — Bloomberg

Bloomberg reports that price growth in the UK is to be held back by lower energy costs and the dollar falling in response to the US president's trade policies.

Bloomberg Economics’ model shows that these factors could curb inflation by 0.4%. Economists surveyed by the news agency project that its rate will hit 3.3% in the third quarter before subsiding. Yet, in February, the Bank of England expected inflation to rise to 3.7%. 

The central bank’s policymakers point out that the exchange rate is one factor able to affect the inflation rate. The pound has gained about 2% against a basket of currencies since the dollar weakened following Trump's tariff announcements. The change is likely to push down the cost of imports, Bloomberg says.  

At the same time, concerns about slowing UK GDP growth driven by US trade policy may prompt the Bank of England to accelerate monetary easing. Tomasz Wieladek of T. Rowe Price believes the regulator will have to push rates below the neutral level and into stimulative territory.

Brent sell
Period: 11.07.2025 Expectation: 400 pips
Brent falls ahead of OPEC+ decisions
04 July 2025 37
Period: 18.07.2025 Expectation: 900 pips
AUDCAD is likely to keep pulling back from its monthly high
04 July 2025 34
Period: 10.07.2025 Expectation: 1200 pips
Selling USDJPY during rebound with 142.430 target
03 July 2025 57
Period: 11.07.2025 Expectation: 220 pips
Heatwaves across Europe and US support gas price recovery from recent lows
03 July 2025 160
Period: 08.07.2025 Expectation: 1500 pips
EURUSD rally faces potential correction toward 1.165
02 July 2025 83
Period: 09.07.2025 Expectation: 1400 pips
USDCAD declines amid US dollar weakness and improving Canadian trade prospects
02 July 2025 57
Go to forecasts