Interest rates likely to stay high despite inflation dip

• Inflation Update: Inflation dipped to 2.8% from 3%, slightly below expectations but still above the Bank of England’s 2% target.
• Future Inflation Trends: Inflation is projected to rise to 3.7% this year due to higher energy prices, new tax year bills, and October’s budget measures. Analysts expect inflation to remain elevated for much of the year.
• Interest Rate Outlook: Despite the dip, interest rates are expected to stay high as the Bank of England aims to control inflation, keeping its base rate at 4.5%.
• Household Impact: Rising costs for energy, water, council tax, and mortgages weigh heavily on households, with “Awful April” anticipated due to significant bill hikes.
• Expert Commentary:
  • Analysts predict limited interest rate cuts this year (one or two at most).
  • Expanded government spending and global trade uncertainty will maintain inflationary pressure.

The economic outlook suggests ongoing challenges for both households and businesses.