NIESR Press Release: NIESR CPI Commentary – The Lockdown Weighted Inflation CPILW For July 2020 and the Prospects for Inflation

Published: 19th August 2020

*FOR IMMEDIATE RELEASE*

The Lockdown Weighted Inflation CPILW For July 2020 and the Prospects for Inflation

Summary

The CPIH measure of inflation has increased to 1.1% and now the gap between the lockdown measure CPILW of 1.2% is small. The use of pre-pandemic expenditure weights is no longer leading to an under-estimate of inflation.

Inflation is set to increase as the pandemic raises costs in many parts of the economy.  This is unlikely to happen in 2020 as demand will remain low as unemployment and bankruptcies increase in the coming months. 

Whilst 2.5% is a reasonable forecast for inflation in 2021, the outturn will partly depend on how the Government and the Bank of England balance the demands of stabilising the economy and keeping public finances sustainable into the future.

Please find the full commentary in attachment

ENDS

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Notes for editors:

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