German Bank: UK inflationary pressures may rise again

Golden Ten Data News on July 23rd, Deutsche Bank's research report today stated that the decline in core inflation in the UK over the past year is mainly due to the drop in commodity prices. There are three reasons for the decline in commodity prices: many consumers purchased durable goods during the epidemic, which means they do not need to buy new durable goods immediately. Income has become tight, leading consumers to cut back on durable goods consumption. The Supply Chain has greatly alleviated additional pressure on prices. However, this situation may not continue. Real income is rising again. At some point, consumers will need durable goods again. In addition, freight has recently become more expensive. In short, inflationary pressures may rise again. If the prices of durable goods stop falling while service prices remain high, the space for core inflation in the UK to decline will be small. Consequently, the UK's Central Bank will have less room to cut interest rates significantly.