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Halving UK inflation little to do with government action, ICAEW says

Author: ICAEW

Published: 15 Nov 2023

Suren Thiru, Economics Director at ICAEW, responded to the UK inflation figures for October 2023, released by the Office for National Statistics today (Wednesday 15 November 2023):

“This dramatic drop suggests that the UK has turned the corner in its battle against soaring inflation, particularly given the fall in core inflation, which indicates that underlying price pressures are also easing.

“While the Prime Minister has achieved his target to halve inflation this year, this owes more to the downward pressure on prices from falling energy costs and rising interest rates than any government action.

“Although subsequent declines will be more modest, the drag on demand from a softening jobs market and high interest rates may mean that inflation falls back to the Bank of England’s 2% target more quickly than they currently expect.

“This fall in inflation seals the deal on a December interest rate hold and may drive a three-way voting split among rate setters with a member voting for a rate cut as concerns over a flatlining economy grow.”


Notes to editors:

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