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NIESR: Head of UK Macroeconomic Forecasting reacts to the latest CPI inflation data released today

NIESR’s Head of UK Macroeconomic Forecasting, Amit Kara yesterday said: “Annual CPI inflation was unchanged at 3.0 per cent in October. Although today’s outturn is just below the level that automatically triggers an explanatory letter from the Governor to the Chancellor, CPI inflation is set to remain stubbornly above the target rate of 2 per cent until at least mid-2019 on our forecast.  Household disposable income will be squeezed as a result.” 

He added: “Today’s inflation data comes alongside other data that point to slightly higher economic growth in the second half of this year. This requires a gradual withdrawal of monetary policy stimulus to stop the economy from overheating especially if, as we expect, productivity growth remains weak in the UK. Consistent with that, our latest forecast is conditioned on a 25 basis points increase in Bank Rate every six months such that the policy rate reaches 2 per cent in 2021

Notes for editors:

For further information and to arrange interviews, please contact the NIESR Press Office:
Paola Buonadonna on 020 7654 1923 / p.buonadonna@niesr.ac.uk   

NIESR aims to promote, through quantitative and qualitative research, a deeper understanding of the interaction of economic and social forces that affect people's lives, and the ways in which policies can improve them.

Further details of NIESR’s activities can be seen on http://www.niesr.ac.uk or by contacting enquiries@niesr.ac.uk . Switchboard Telephone Number: +44 (0) 207 222 7665

 

Original article link: https://www.niesr.ac.uk/media/niesr-press-note-%E2%80%93-head-uk-macroeconomic-forecasting-reacts-latest-cpi-inflation-data-0

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