The outlook for UK inflation and Bank Rate is a balance between global inflationary pressures on the one hand, and weak domestic demand and a loose labour market environment on the other. In Fathom’s view, the latter will provide enough of a counter-balance to contain any second-round effects from energy- and food-price pressures on headline CPI inflation, allowing the Monetary Policy Committee (MPC) to hold rates at 3.75% until 2027 Q2 instead of hiking.