The large divergence between core and headline CPI reflects pressures from lower energy and food prices. Despite this, most Monetary Policy Committee (MPC) members have reiterated that the next move for the bank will be a hike.
The BoE monitors factors that are likely to impact inflation in the medium term (over the next 18-24 months), such as wage growth and the amount of spare capacity in the economy. Wage growth has picked up since the summer, but it remains below the pre-crisis long-term average growth rate.
"We expect the Bank of England (BoE) to keep the Bank Rate unchanged at 0.5% in its 9 April meeting. Headline CPI inflation eased to a historically low 0.0% y/y in March. Core CPI slowed to 1.2% y/y, a five-year low", Says Standard Chartered
