ICAEW.com works better with JavaScript enabled.

UK inflation outlook improving despite surprise December increase, ICAEW says

Author: ICAEW

Published: 17 Jan 2024

Suren Thiru, Economics Director at ICAEW, responding to the UK inflation figures for December 2023, released by the Office for National Statistics today (Wednesday 17 January 2024):

“This unexpected rise in inflation is a timely reminder that the struggle against soaring inflation is not yet over, particularly given stubbornly high core and services inflation.

“While inflation may rise again in January, following the increase in Ofgem’s energy price cap, it should fall at a decent pace thereafter, aided by the expected drop in energy bills from April and lower food inflation.

“Although ongoing tensions in the Red Sea may make core inflation harder to shift, the rate should drop back this year as demand is supressed by slower wage growth and a struggling economy.

“Though interest rates will remain on hold next month, with the outlook for inflation for this year improving and the economy struggling to avoid recession, the case for cutting rates sooner rather than later is likely to grow.”


Notes to editors:

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