The UK's inflation rate has plummeted below the Bank of England's 2% target for the first time since 2021, marking a significant milestone in the country's economic recovery. However,  as prices cool, the heat is on for policymakers to make their next crucial move, with all eyes on the MPC’s decision next month. However, while headline inflation appears tamed, the inflation genie isn't fully back in the bottle, as the elevated core and services measures could give the BoE pause for thought.

The persistence of inflation in the services sector is particularly noteworthy, as it often reflects wage pressures, which can be more challenging to bring down. The latest inflation figures present a complex picture for the Bank of England, with the stubbornly high core and services inflation rates necessitating a more cautious stance. As the UK celebrates its inflation rate dropping below the 2% target, the question remains whether this is a true victory or merely a deceptive false dawn.