The latest figures on consumer price inflation have just been released by the ONS show that annual CPI has been running below the Bank of England’s target of 2% at 1.7% for the last two months of August and September.
This means that pressure on interest rates is significantly mitigated and likely that the next few months will certainly see at worst static rates (0.75%) or perhaps even a cut if the global economy slows down or if the domestic economy suffers due to Brexit.
This month’s forecast for October’s outturn year to date was 1.6%. That would be the lowest figure since January 2017. The actual number just announced is 1.5%.
Founder and CEO of REL Capital, Andy Scott, commented:
“The latest inflation measure will be very welcome and should even bring a smile to the face of the Bank of England Governor, Mark Carney
The expectation was that consumer price inflation would fall from its recent trend of 1.7%, a pretty low number all in all, to 1.6%. The fact that the actual outturn is just 1.5% further reinforces the prospect of a continuation of the current Bank rate of 0.75%, or perhaps even spells the prospect of a cut in the New Year.
A further drop in the cost of borrowing would be fantastic news for homeowners with a mortgage and, for the beleaguered business community, it would come as welcome defibrillation against a political climate that seems to have largely ignored the importance of the business community whilst it bickers about Brexit.”
