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NIESR’s Head of UK macroeconomic forecasting, Amit Kara yesterday commented on the latest CPI inflation data.

NIESR’s Head of UK macroeconomic forecasting, Amit K

ara yesterday said:

“CPI inflation rose from 2.9 per cent in August to 3.0 per cent in September. Looking ahead into the final quarter of this year, there is every chance of inflation peaking at a level above 3 per cent, thereby triggering an explanatory letter from the Bank of England Governor to the Chancellor. Household disposable income will remain squeezed as a result.” 

He added: “Today's inflation data together with high employment levels and our view that economic growth is nudging higher in the second half reinforces our judgment that the Bank of England will reverse the 25 basis point reduction in Bank Rate announced in August last year at its November meeting.  Additional rate increases might be necessary to ensure that the economy does not overheat as we begin to incorporate the negative impact of Brexit on productivity growth.”

Notes for editors:

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