UK inflation remains hot and elevated

Headline UK inflation unexpectedly held at 8.7%, whilst core inflation (which strips out food and energy prices) rose 7.1% year-on-year. The latest inflation figures paint a gloomy picture ahead for the UK economy because it's likely the BOE will need to ramp up interest rates further to cool inflation. In other words, a recession may be necessary to prevent prices rising too fast. The inversion in gilt yield curves is also widening, a reaffirming sign that a recession is looming if not already in one. The next monetary policy committee meeting will take place on the 22nd of June where the BOE is expected to increase interest rates by 0.25%, with markets betting the base rate to reach 6% by year end. A warranted bet, as inflation has again proved it's stubbornness.