- Dividend hero with reasonable costs
- Plus a strategy possibly ripe for a turnaround
News inflation finally hit the Bank of England’s two per cent target in May is much needed good news for the UK’s beleaguered Conservative government. Although the news has probably come too late for prime minister Rishi Sunak, investors can take stock and make more long-term plans. While the BoE will require evidence that services inflation and wage growth are slowing before it cuts interest rates, investors can think about locking in attractive yields and growing pay-outs.
The drop in the consumer prices index (CPI) is a positive development after three years of inflation misery. That said, the stock market’s reaction suggested a dose of realism in expectations for the timing of interest rate cuts. Core inflation, still at 3.5 per cent, driven by services inflation underpinned by robust wage growth means the BoE will tend towards caution.
