Insights

Weekly Market Commentary – 21st February

24 February 2025

This week UK inflation accelerated unexpectedly. The basket of goods used to make up the prices index is a best attempt at replicating average spending and sometimes this is more representative than others. The recent pick up in services inflation is partly due to the introduction of VAT to private school fees and, while this will be felt keenly by those affected, it is far enough from the average experience to be put down as a bump in the figure. Services inflation overall remains a significant driver of price rises and, combined with increasing wages, will give the Bank of England more reason to remain cautious when it comes to interest rates.