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Hopes of August rate cut fall after UK inflation stays at 2%
Analysts suggest hotel demand around star’s Eras tour helped cost of living measure to defy forecasts of a fall
The chances of an August interest rate cut have suffered a blow after higher hotel prices – blamed by some analysts on a “Taylor Swift effect” – meant progress in the UK’s fight against inflation stalled last month. Sharp falls in clothing prices as retailers sought to offload summer stocks were offset by the rising cost of hotel stays, the Office for National Statistics(ONS) said. Luke Bartholomew, the deputy chief economist at the fund manager Abrdn, said: “Today’s inflation report will keep the Bank of England’s August rate decision on a knife-edge.
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