A March rate cut was never in contention and still isn’t following what looks to be a hotter UK CPI report yesterday here. But as mentioned then, there were some caveats to the latest jump in inflation numbers. For one, a steep rebound in airfare prices was a key contributor alongside the introduction of VAT on private school fees. Meanwhile, the monthly figures actually reflected a decline in price pressures relative to December last year. So, there’s that.
In any case, traders are not looking too much into all of that as such. The odds of a May rate cut were ~71% previously but are now down to just ~68%. As for the entirety of the year, traders are still looking for ~50 bps of rate cuts by the final meeting in December. So, that hasn’t changed.