7.8% give or take
Actually 6.2%: for some strange reason I'd used 134 as the April figure (instead of the correct 133.5) which extrapolated to 7.8%.
This is all at the risk of losing the main point which is that the BoE do not base their rate decisions on amateur extrapolations of the latest few months of inflation. In actual fact I think they would be acutely aware of the few months of steady CPI index and how it looks to the layman, but they have to look through this sort of short-term noise and try to determine what is
actually happening in the rates markets, in the banking system, in the consumer supply-and-demand situation and the strength of the economy -- and their longer-term effects on inflation. That is very difficult in the wake of two impulsive shocks: the supply and demand shocks of COVID and the supply chain, sanctions and energy shock of the 2022 Russian war escalation.
The fact is that when you look through those shocks the underlying economic trend is strong. Recovery has been in progress for some six years now, with the underlying trend in rates steadily upward, to the current point where short yields and money rates are above 4% in the UK and USA, yet the economy is still motoring. With inflation still running above target and looking hottish in the short term I think rates may remain high.
It also bears repeating what I've said before: rates only tend to come down when everyone finally expects them to keep rising. Of course this is not iron-clad but I think it is important to bear in mind before jumping on the "interest rates must drop" bandwagon.
GS