Introduction: Will UK inflation fall today?
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Today could be an important day in the UK’s battle against rising prices.
Economics predict that UK inflation fell in September, to around 1.9% – crucially below the Bank of England’s 2% inflation target, for the first since since April 2021.
Such a fall would be a relief for the Bank of England, which has been trying to squeeze inflation out of the economy through higher interest rates, and could pave the way for a cut in borrowing costs in November.
In August, inflation was recorded at 2.2%, and many in the City expect the rate of price rises slowed last month – further away from the peak of 11.1% in October 2022.
Economists at Pantheon Macroeconomics have predicted a 1.9% reading for the month, driven by the sharp fall in motor fuel prices last month.
Pantheon added that falling air travel fares are also likely to contribute to a dip in inflation, although these could be partially offset by higher domestic hotel prices.
Investec analysts have suggested CPI could drop as low as 1.7%, largely driven by that “hefty” fall in fuel prices.
We get the data at 7am…
The agenda
-
7am BST: UK inflation report for September
-
9.30am BST: House price and rental costs data from the ONS
-
Noon BST: US weekly mortgage approvals
-
2pm BST: IMF to publish a chapter of its World Economic Outlook
Key events
Deutsche Bank: September inflation to drop to cyclical low
Deutsche Bank predict UK inflation will drop to 1.8% in September, which will be a “cyclical low”, they say.
The bad news for consumers is that Deutsche also believe “upward momentum” will likely gather pace, pushing inflation up again.
Sanjay Raja, their chief UK economist, told clients:
The recent run of energy deflation will likely come to an end shortly. Indeed, pump prices are likely to reverse course in October, while dual fuel bills will see a hefty 10% rise.
The upcoming Autumn Budget also raises risks to short-term inflation, with alcohol and tobacco duty increases potentially in the offing. A 10-15% net increase in VAT is also expected for private school fees come Jan-25. And lastly, an unwind of the fuel duty cut also looks likely in March/April.
Introduction: Will UK inflation fall today?
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Today could be an important day in the UK’s battle against rising prices.
Economics predict that UK inflation fell in September, to around 1.9% – crucially below the Bank of England’s 2% inflation target, for the first since since April 2021.
Such a fall would be a relief for the Bank of England, which has been trying to squeeze inflation out of the economy through higher interest rates, and could pave the way for a cut in borrowing costs in November.
In August, inflation was recorded at 2.2%, and many in the City expect the rate of price rises slowed last month – further away from the peak of 11.1% in October 2022.
Economists at Pantheon Macroeconomics have predicted a 1.9% reading for the month, driven by the sharp fall in motor fuel prices last month.
Pantheon added that falling air travel fares are also likely to contribute to a dip in inflation, although these could be partially offset by higher domestic hotel prices.
Investec analysts have suggested CPI could drop as low as 1.7%, largely driven by that “hefty” fall in fuel prices.
We get the data at 7am…
The agenda
-
7am BST: UK inflation report for September
-
9.30am BST: House price and rental costs data from the ONS
-
Noon BST: US weekly mortgage approvals
-
2pm BST: IMF to publish a chapter of its World Economic Outlook
