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Summer rate cuts likely as inflation struggle nears finish line, ICAEW says

Author: ICAEW

Published: 20 Mar 2024

Suren Thiru, Economics Director at ICAEW, responded to the UK inflation figures for February 2024, released by the Office for National Statistics today (Wednesday 20 March 2024):

“This notable decline is further evidence that the UK is fast approaching the finish line in its battle against surging inflation.  

“The last mile of this inflation marathon should be the easiest with lower energy bills, following the cut in Ofgem’s energy price cap, likely to drag the headline rate back to the Bank of England’s 2% target in April.

“With the lagged impact of earlier interest rate rises and a weak economy likely to constrain price pressures throughout this year, the Bank of England’s forecast that inflation will start drifting higher later this year looks excessively downbeat.    

“While interest rates will be kept on hold on Thursday, these figures may drive a more dovish vote split and meeting minutes as policymakers set the scene for summer rate cuts.”


Notes to editors:

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