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Sticky September inflation to be surpassed by bigger drop in October, ICAEW says

Author: ICAEW

Published: 18 Oct 2023

Suren Thiru, Economics Director at ICAEW, responded to the UK inflation figures for September 2023, released by the Office for National Statistics today (Wednesday 18 October 2023):

“Unchanged inflation in September is a timely reminder that the struggle against eye-watering price rises is yet to be won, particularly given rising services inflation.

“A sizeable decline in inflation is likely in October, with lower energy bills following the cut in Ofgem’s energy price cap – and a favourable comparison to October 2022 when inflation peaked, dragging the headline rate below 6%.

“While rising global oil and gas prices are an upside risk, the looming squeeze on wages from softening labour conditions and a waning economy should help put inflation on a firm downward trend.

“September’s sticky inflation keeps November’s interest rate decision on a knife edge. However, restarting monetary tightening risks needlessly suffocating economic activity and deepening the financial distress for people and businesses.”

On the impact of September’s CPI inflation rate on firms' business rates bills in the next financial year, Suren added:

“Many firms are now facing painful rises next April as business rates increase in line with September’s CPI inflation, exacerbating the financial squeeze many are already struggling with.”


Notes to editors:

Contact: ICAEW media office at media.office@icaew.com, tom.mackintosh@icaew.com