"The fall in CPI inflation to 2.8% in May increases the likelihood at the margin of more quantitative easing "
- George Buckley at Deutsche Bank
U.K. inflation eased unexpectedly to 2.8 per cent in May, the lowest level in more than a year, said the Office for National Statistics on Tuesday.
"Mervyn King's comments last week indicated that more QE will soon be forthcoming and these figures might help to sway any of the more wavering members into voting for more stimulus," said Vicky Redwood, an economist at Capital Economics.
"Expect further falls in inflation as energy bills rise less over the summer versus last year," said George Buckley at Deutsche Bank.
"The fall in CPI inflation to 2.8% in May increases the likelihood at the margin of more quantitative easing (QE)... We expect £50bn with a sizable risk of a 25 basis point rate cut to boot."
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