![]() ![]() No doubt the Fed has been paying close attention to today’s PCE figures, as the central bank’s preferred measure of inflation. ![]() This marks a significant retreat from the 1981-year highs above 9pc seen last year. With PCE and core PCE both declining in June, this echoes the recent slowdown in the headline US inflation rate which has fallen to 3pc, the lowest level since March 2021, and not far off the Fed’s 2pc target. The US PCE price index points to further signs of cooling price pressures stateside. I’ll leave you with the thoughts of Victoria Scholar, head of investment at Interactive Investor, who explains why the drop in US price pressures shines a light on the UK’s persistent inflationary problem. “More hikes are likely necessary from the Bank of England with inflation still stuck close to 8pc, more than twice as high as that of the US.” Victoria Scholar, head of investment at Interactive Investor, said: “The drop in US price pressures shine a light on the UK’s persistent inflationary problem. New data from the Insolvency Service showed companies in England and Wales went bust at their fastest rate since the global financial crisis in the three months to June, as interest rates hit their highest level since 2008. ![]() Money markets are forecasting a peak in UK interest rates of at least 5.75pc, which would be the highest since 2007. It comes as the Bank of England is expected to raise interest rates for a 14th consecutive time next week from their present 15-year high of 5pc. Gregory Daco, chief economist at EY-Parthenon, asked whether the US is heading for an “immaculate soft landing” whereby it would bring down inflation without pushing the economy into recession through higher interest rates. ![]()
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