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Podcast: Beyond Currency
Episode: 20 July 2023 - Size of next U.K. rate hike is now in doubt
Description: The headline rate of inflation fell to 7.9% in June, the lowest it has been in more than a year. Inflation had been predicted to fall from the rate of 8.7% seen in May to 8.2%.
The market immediately divested itself of long Sterling positions, believing that the fall in the rate of inflation means that the Bank of England is less likely to feel the need to add a further fifty basis points to the base rate of interest.
While this is one scenario, the Bank may also consider that having seen the effect of a larger-than-expected hike last month, they may...