Schroders global head of economics David Rees said UK inflation is under control, wage growth is slowing and unemployment near 5% implies substantial spare labour capacity, so current conditions do not necessitate an immediate Bank of England rate rise. He warned fiscal policy is the bigger risk: October’s budget is pivotal — a large spending package could rekindle domestic inflation and bring forward tightening, though existing pressure in the UK gilt market should reduce the likelihood of infl

Schroders global head of economics David Rees said UK inflation is under control, wage growth is slowing and unemployment near 5% implies substantial spare labour capacity, so current conditions do not necessitate an immediate Bank of England rate rise. He warned fiscal policy is the bigger risk: October’s budget is pivotal — a large spending package could rekindle domestic inflation and bring forward tightening, though existing pressure in the UK gilt market should reduce the likelihood of inflationary fiscal expansion. The Bank still has scope to look through a temporary headline inflation uptick driven by higher energy prices.