The past appreciation of the euro may still weigh on inflation for several more quarters, but this effect could be masked by the increased pricing power of firms, the European Central Bank said in a research article on Wednesday.
British households enjoyed the fastest growth in employment income in at least nine years in June, according to a survey that may give the BoE concern that underlying inflation pressures are rising.
British inflation fell unexpectedly in April, according to figures that could add to doubts about when the Bank of England will raise interest rates again.
UK manufacturing growth slid to a 17-month low in April, extending a run of mediocre economic data and further reducing the chances of an interest rate hike by the BoE.
Inflation expectations among people in Britain for the year ahead remained unchanged at 2.4 percent in April.
Sterling fell another 0.3 pc to a two-week low after Carney signalled that the central bank may not rush to raise interest rates in May because economic data was “mixed”.
BoE should raise interest rates gradually, not glacially, and no longer needs to keep its foot firmly on the accelerator at a time of rising domestic inflation pressure.
British retail sales recorded their biggest quarterly fall in a year during the three months to March, after unusually cold and snowy weather kept shoppers at home.
Workers in Britain have yet to see their wages rise more quickly than inflation despite unemployment falling to its lowest rate since 1975, according to official data.
Sterling gained slightly against the dollar and euro, helped by a report that Britain will propose a new solution for the Irish border dispute holding up Brexit talks.