Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK inflation expected to dip below 2% for first time in over three years

by October 12, 2024
October 12, 2024
UK inflation expected to dip below 2% for first time in over three years

Annual inflation in the UK is expected to fall below 2% for the first time since April 2021, according to data anticipated to be released next Wednesday.

Official figures are predicted to show a decline in consumer price inflation (CPI) from 2.2% in August to between 1.8% and 1.9% in September, marking the first time inflation has dipped below the Bank of England’s 2% target in more than three years.

The expected drop in inflation comes as a result of falling global energy prices, the resolution of supply chain issues following the pandemic, and the impact of aggressive interest rate hikes. Annual inflation has been steadily declining since peaking at 11.1% in October 2022.

Economists suggest the September inflation figure may be even lower than the Bank of England’s forecast of 2.1%, driven by a sharp reduction in energy and oil prices last month. Analysts at Barclays suggest inflation could fall to 1.7%, while Deutsche Bank points to broader energy price deflation and dips in food, tobacco, and services costs pushing inflation down to 1.8%.

Sanjay Raja, chief UK economist at Deutsche Bank, said, “After headline CPI moved sideways in August, we expect inflation to drop to a new cyclical low in September.”

This anticipated decline in inflation will increase pressure on the Bank of England’s monetary policy committee (MPC) to consider further interest rate cuts. Andrew Bailey, the Bank’s governor, recently warned that ratesetters may need to be “a bit more aggressive” with interest rate reductions if inflation continues to weaken and the economy shows signs of slowing.

The UK economy has seen a marked slowdown in growth in recent months, with GDP stagnant in June and July, and growing only by 0.2% in August, compared to 0.7% quarterly growth at the start of the year.

Konstantinos Venetis of TS Lombard said, “Inflation is settling lower, leaving the economy struggling to maintain momentum. Evidence of a soft patch taking shape is becoming clearer, pointing to the need for a shot in the arm from looser monetary policy.”

Traders now expect the Bank to cut interest rates twice before the end of the year, potentially bringing the base rate down to 4.5%.

However, inflation is likely to rise again in the coming months, with household energy prices increasing by 10% in October and oil prices climbing due to tensions in the Middle East. Additionally, measures from Rachel Reeves’ upcoming budget on October 30, such as introducing VAT on private school fees and potential duties on alcohol and tobacco, could also push inflation back up.

Read more:
UK inflation expected to dip below 2% for first time in over three years

0
FacebookTwitterGoogle +Pinterest
previous post
Scottish Power owner Iberdrola commits £24bn to upgrade UK’s green energy infrastructure
next post
VP Harris releasing detailed medical report, challenging Trump to do the same

You may also like

AstraZeneca moves $360M investment in a new manufacturing...

February 9, 2023

Farage proposes £250k tax break for non-doms, triggering...

June 24, 2025

HMRC dismissals for gross misconduct hit five-year high...

September 12, 2024

Simon Cowell backs new streaming platform launched to...

October 23, 2023

Companies desperate to recruit skilled workers push up...

February 13, 2023

The Integral Role of Booking Engines in Modern...

April 18, 2024

Tony Danker launches ‘Growth Incorporated’ following CBI departure...

February 12, 2024

How to Spot Roof Damage Before It Becomes...

May 20, 2025

Four-day week made staff more stressed, says tech...

October 2, 2023

Google Play Store Introduces New Features

October 4, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Padel club boom sees 3,200 venues built in 2024 as global popularity accelerates

      June 27, 2025
    • Sweet or taxable? M&S strawberry sandwich sparks new VAT debate

      June 27, 2025
    • Starmer thanks business for footing tax bill

      June 27, 2025
    • UK SMEs must strengthen cybersecurity as geopolitical threats escalate, warns Espria

      June 27, 2025
    • Jeremy Hunt ‘made a mistake’ targeting non-doms, says shadow business secretary

      June 27, 2025
    • Small firms raise alarm over Companies House rule change forcing profit disclosure

      June 27, 2025

    Categories

    • Business (8,326)
    • Investing (2,074)
    • Politics (15,824)
    • Stocks (3,172)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved