MNI UK Inflation and Labour Market Insight: July 2025 Release

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• Relative to market expectations both the labour market report and CPI were a little stronger than expected.
• All in all, we think there is still enough evidence for the MPC to vote for a 25bp cut in August, and probably still enough for quarterly cuts to continue thereafter, but these data do reduce the risk of sequential cuts soon (particularly with CPI a little higher this week too) and probably swing us from quarterly cuts with a small risk of sequential cuts being the base case, to perhaps a November cut shouldn't be fully anticipated.
• We look at how sell side BOE views have evolved in light of the data releases and at market pricing over the past week.
• We also look in detail at both the labour market and CPI data.