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Significant inflation fall undermines Bank of England pessimism, ICAEW says

Author: ICAEW

Published: 20 Dec 2023

Suren Thiru, Economics Director at ICAEW, responded to the UK inflation figures for November 2023, released by the Office for National Statistics today (Wednesday 20 December 2023):

“This startling fall in inflation will further reassure people and businesses that there is light at the end of the tunnel in the struggle against eye-watering price rises.

“Inflation should continue slowing at a decent pace next year as a struggling economy and lower food costs help drag the headline rate to within touching distance of the Bank of England’s 2% target by the Autumn.

“Easing core and services inflation suggest that underlying price pressures are relenting. The likely squeeze on wages from rising unemployment and a stagnating economy should help to continue to keep them on a downward trajectory.

“These inflation numbers suggest that the Bank of England is too pessimistic in its rhetoric over when interest rates could start falling. A deteriorating economy could push the Bank to start loosening policy by the Autumn, particularly if inflationary pressures continuing easing.”

ENDS

Notes to editors:

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

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