Gas Market Turmoil Threatens to Halt Slide in UK Inflation
- Prices in UK are still rising more than triple BOE’s 2% goal
- Energy price cap likely to plateau or even tick higher
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Renewed pressure in the UK’s energy market risks derailing Bank of England Governor Andrew Bailey’s effort to rein in inflation.
The huge decline in natural gas and electricity prices this year has helped the UK cut inflation to 7.9% in June from a 41-year high of late last year. The Bank of England indicated earlier this month that the rate of inflation could fall by more than half this year, and toward its 2% target by 2024. But rising natural gas and electricity prices would slow down that trajectory.