Why Inflation Is Still on the Over‑rate Watch
The Office for Budget Responsibility (OBR) is waving a red flag that inflation will stay above the Bank of England’s comfy target. In fact, the OBR’s latest forecast pushes the Consumer Prices Index (CPI) for 2024 to about 2.5%—up from the previous 2.2% estimate.
What sparked the bump?
- Household budgets are still feeling the squeeze.
- Petrol prices have not given us the relief we expected.
- September’s drop to a three‑year low (1.7%) was a nice surprise, but it’s short‑lived.
Bank of England moves… or not
In August the Bank cut rates from a 16‑year high of 5.25% to 5%. Whether it’ll trim the base rate again in November is still up in the air.
OBR’s sneak peek into the coming years
- 2024: CPI at 2.6%
- 2025: 2.3%
- 2026: 2.1%
- 2027: 2.0%
Market chatter
Money markets are betting that the Monetary Policy Committee might slash rates to 4.75% next month, but the certainty is as shaky as a wobbly glass of tea.
Stay tuned!
Want real‑time updates? Subscribe to get the latest buzz on this and other economic headlines right on your device.
