Deutsche Bank Analyst: UK Inflation Target of 2% Now a Distant Memory

Deutsche Bank analyst Sanjay Raja has expressed concerns over the UK's inflation outlook, citing significant increases in energy prices. According to Jin10, Raja noted that the Bank of England's goal of returning to a 2% inflation target seems increasingly unlikely. He stated, "The resurgence in inflation will put an end to any discussions of rate cuts this year. Moreover, the risk of the Bank of England changing its policy to raise interest rates can no longer be ignored." Raja highlighted that oil prices rose by nearly 7% in March and are expected to increase similarly in April. Additionally, potential spillover effects on other consumer price index basket items are growing, with fertilizer prices rising and shipping costs soaring, raising the possibility of second-round effects. He anticipates that the inflation rate will peak at around 3.5% later this year.