The United Kingdom experienced a milestone as headline inflation reached the Bank of England's 2% target for the first time in almost three years. Despite this, traders are not convinced of an imminent interest rate cut, with only a 5% probability indicated by money market pricing for a reduction during the upcoming BOE meeting. Services inflation, critical for understanding price pressures in the services-driven economy, exceeded expectations at 5.7%. While the recent 2% inflation reading was largely influenced by energy price declines, analysts anticipate fluctuations in the rate in the future. Chief economist James Sproule highlighted concerns about services inflation, driven by salary and earnings trends, which have remained stubbornly high. The decision on rate cuts in August or September remains uncertain, with the BOE closely monitoring wage growth and labor market conditions. The upcoming general election adds further complexity to the economic outlook.