Moneyfarm CIO: Sinking inflation won't change fiscal pressures, tariffs hamper BoE rate cuts

On 26 March, Richard Flax, chief investment officer at Moneyfarm, said in a report that data showing a modest drop in UK inflation in February is unlikely to ease fiscal pressures, according to Golden Ten Data.

The UK's annual headline inflation rate fell slightly more than expected to 2.8 per cent in February from 3.0 per cent in January.

Flax said the UK Chancellor of the Exchequer may take some comfort from the continued easing of inflation, but this modest drop will do little to alleviate fiscal pressures.

He also said the risk of tariffs could raise the cost of imports and drive up inflation, thus limiting the Bank of England's room for rate cuts.