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Easing inflation may force interest rate voting split, ICAEW says

Author: ICAEW

Published: 19 Apr 2023

Suren Thiru, Economics Director at ICAEW, responds to the UK inflation figures for March 2023, released by the Office for National Statistics today (Wednesday 19 April 2023):

“Although still astronomical, this drop suggests inflation has resumed its descending trajectory with falling energy prices dragging down the headline rate. 

“March’s decline should be followed by a bigger drop in April due to strong base effects caused by the comparison with April 2022, when Ofgem increased the energy price cap by 54%. 

“While core inflation is likely to prove more stubborn, the squeeze on consumer demand from rising taxes and the lagged impact of raising interest rates should put it on course for a firm downward path by the Autumn.  

“This drop in inflation and the prospect of further falls may drive a bigger split in Monetary Policy Committee voting in May as concerns grow over a flatlining economy.” 


Notes to editors:

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