Forex & Economic Commentary by Lloyds TSB

The BoE will this morning publish its latest Inflation Report, outlining its forecasts for gdp growth and inflation based on implied interest rates, currently 5.0%. The dilemma facing the Bank was underlined yesterday when inflation data for July showed a rise in headline and core CPI. Annual CPI accelerated to 4.4% and in our view is still some way off its peak, expected in August/September as pipeline inflation pressures come to the fore.

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