LiveMore comments on the fall in inflation
Simon Webb, managing director of capital markets and finance at LiveMore, commented: “After two months of no movement in inflation, it is good to see the October figures showing a significant fall to 4.6%. Inflation is now well under half of what it was a year ago at its peak of 11.1% but it still has some way to go to reach the 2% target.
“The drop in inflation was partly driven by a 7% reduction in the Ofgem price cap, compared to a 25% increase in October last year. Those high hikes in energy costs last year now fall out of the annual inflation figures.
“Core inflation, which removes food and energy prices, was also down to 5.7% from 6.1%, and plays a key part in the Monetary Policy Committee’s interest rate decisions.
“This latest inflation data should be enough to keep base rate at 5.25% although there is still division in the MPC. The Bank of England’s chief economist Huw Pill recently suggested there was no need to increase base rate as inflation is steadily falling. However, governor Andrew Bailey believes it is too soon to say that rate rises have ended.”
Published: 15 November 2023