ING Groep: Service sector inflation remains high, and the Bank of England will continue to cut interest rates

Service sector inflation is expected to rebound by about 5% before entering winter, while the overall CPI in January may be close to 3%. This reduces the likelihood of a rate cut in December, but in spring, ING believes that the Bank of England is still likely to accelerate its easing cycle. In October, service sector inflation in the UK was slightly higher than economists' general expectations, but 5% is only slightly above September's figure, which aligns with the Bank of England's forecast. However, interestingly, when delving into the details, you will find that the recent stickiness largely lies in categories that the central bank seems to consider less important or less indicative of "persistent" inflation