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Inflation: Painful deceleration on the way as rate rise on Thursday inevitable, ICAEW says

Author: ICAEW

Published: 14 Dec 2022

Responding to the UK inflation figures for November 2022, released by the Office for National Statistics today (Wednesday 14 December 2022), Suren Thiru, Economics Director at ICAEW, said:

“While these figures suggest inflation has peaked, it nevertheless remains at a precariously high rate which is having a real impact on people and businesses.

“November’s slowdown could be the start of a painful deceleration in inflation as slowing demand, rising interest rates and falling commodity prices weaken the headline rate, but at the cost of a protracted recession and notably higher unemployment.

“With inflationary pressures looking more broad-based, the pace of easing is likely to be slow, which implies that wage growth will continue to trail inflation for some time, providing little respite to financially-squeezed households.

“Although another large interest rate rise on Thursday is inevitable, a growing split in Monetary Policy Committee voting could point to a more moderate pace of monetary tightening as recession risks crystallise.”


Notes to editors:

Contact: ICAEW media office media.office@icaew.com, tom.mackintosh@icaew.com or 07866 853 841