NIESR Press Note – Head of UK macroeconomic forecasting reacts to the latest ONS CPI inflation data released today
NIESR’s Head of UK macroeconomic forecasting, Amit Kara said: “CPI inflation was 3.1 per cent over the 12 month period to November. This is the highest reading since March 2012. Inflation is now more than 1 percentage point away from the 2 per cent inflation target, automatically triggering an explanatory letter from the Governor to the Chancellor. We understand however that this letter will not be published until the next Inflation Report in February”.
He added: “We expect inflation to peak at current levels in the final quarter of this year before dropping back to the target rate by mid-2019. The Bank will in our view raise the policy rate every six months until the policy rate reaches 2% by mid-2021, with the next increase in May. Wage growth is likely to remain under pressure as a result”.
Notes for editors:
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