UK economy: inflation forecast to remain at 0%

Interest rates less likely to rise from historic low of 0.5% as falling energy prices and strong pound anchor inflation to well below 2% CPI target

Falling oil prices and a strong pound are likely to have anchored inflation at zero for a second successive month in July, giving further reason for Bank of England policymakers to delay raising interest rates.

City economists said official figures to be published on Tuesday are likely to show consumer price inflation (CPI) remained at zero last month. The rate, which is used by the government as its official measure to set pensions, wages and benefits, fell to 0% in February, and has remained close to that level ever since.

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