UK Inflation Becomes a Whisper, Not a Shout
Good news is coming to the calendars on Wednesday – the Office of National Statistics will finally pop the curtain on the latest Consumer Price Index figures. The headline? A drop to 4.3% in November, down from the previous month’s 4.6%. Petrol and food prices seemed to take a breather, soothing the trend.
But the Bank of England (BoE) Keeps Its Hats Tight
In a twist that feels like the weather forecast for summer, the BoE is telling everyone that the dream of bringing inflation to the perfect 2% target is still hanging in the distant future. “No interest rate cuts on the horizon” – that’s the official vibe. The message is the same: we’re still in the brakes, not the accelerators.
Insider Musings from “The Economist’s Whispering Brains”
- Investec economist Sandra Horsfield says the UK’s inflation battle looks longer and tougher than the US or eurozone. She points out that low ‘core’ inflation (the steady part) is much closer in those regions.
- Horsfield notes that households can feel the pain of price hikes. The Bank is aware of it, but the progress remains a slow crawl.
- She predicts the BoE won’t consider cutting rates from 5.25% until at least summer 2024, and maybe even August.
Monetary Policy Committee’s Calm on the Frontline
- Ben Broadbent, MPC member reiterated that wage growth still keeps inflation roughly equal to the job market. Because when workers demand more pay, businesses often tag those costs onto prices.
- He highlighted that before rates can dip, there must be a clearer and truer downturn.
- Broadbent warned of the volatility in stats – “we need a steady decline to say we can safely pull the trigger.”
Glint of Hope from Andrew Bailey
Bank governor Andrew Bailey previously reminded that corporate wage hikes shouldn’t outrun inflation. “If wages climb faster than prices, it’s a recipe for a price spiral,” he said.
For the People Holding Their Breath
So what does this mean for your wallet? Inflation’s easing remains a gradient walk, not a sprint. Keep your piggy bank in check, your grocery list realistic, and stay tuned for the official release on Wednesday – the newest chapter in the UK’s inflation story.
