FX Week

HICP may delay rate rises

The move to HICP has led to the creation of a new target of 2% for inflation, which, in the long run, equates to approximately a 0.2% rise under the RPIX [retail price index excluding mortgages] measure. HICP is currently lower than 2%, while RPIX remains above target.

However, said Lara Rhame, FX economist at Brown Brothers Harriman in New York, "the Bank policy actions depend on the outlook for inflation, rather than its current pace, and the two measures are expected to converge over the n