Inflation’s been a hot topic since the Brexit vote caused a sharp drop in sterling 18 months ago. But logic has always dictated that once the effect of the weaker pound had percolated into the real economy, it should then start to drop out of the year-on-year calculations 12 months later.
Published: 24 January 2018
There is little doubt that December’s fall in inflation is welcome given the pressures on households and stubbornly below inflation wage rises. But it is only a small fall and we’re not out of the woods yet. What remains to be seen is whether inflation has peaked or if there is more in the pipeline.
Published: 23 January 2018
There is little doubt that a fall in inflation is welcome given the pressures on households and anaemic wage growth. What remains to be seen is whether inflation has peaked or if there is more in the pipeline. It had been thought that inflation would peak at 3 percent in October only for the markets to be taken slightly by surprise when it continued to rise in November.
Published: 22 January 2018
In any case, it would have been an easy letter to write. The spike in inflation should be temporary, as the effect of the weaker pound filters through to prices. And the Bank has already responded, with Carney and colleagues raising interest rates last month.
Published: 25 November 2017