The United Kingdom will release the Consumer Price Index (CPI) data on Wednesday, November 15 at 07:00 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of four major banks regarding the upcoming UK inflation print.
Headline is expected to fall to 4.8% year-on-year vs. 6.7% in September. Core is set to drop slightly at 5.8% YoY vs. the prior release of 6.1% in September. If so, headline would be the lowest since October 2021 but still above the 2% target.
UK headline inflation will drop sharply in October, likely matching the BoE's forecast of 4.8% YoY, largely on the back of base effects in the energy component. Services inflation likely remained below the BoE's forecast though (TDS: 6.7%, BoE: 6.9%), and should reinforce the widely-held view that the Bank is done hiking rates.
We expect a further deceleration. This includes forecasts of a 4.74% YoY (6.7% in September) print for the headline CPI and a 5.81% YoY (6.1%) reading for core.
We expect i) a fall in headline inflation from 6.7% to 4.7% (BoE: 4.8%), ii) a small fall in services inflation from 6.9% to 6.7% (BoE: unchanged at 6.9%), iii) an equivalently modest decline in core inflation from 6.1% to 5.9%, and iv) a fall in RPI inflation from 8.9% to 6.7% (index to 380.1).
A massive decline in energy inflation should see CPI fall by 2.1pp to 4.6% YoY in October, meaning inflation has halved since the start of the year, which was one of the Prime Minister’s five pledges, while core inflation could prove to be stickier at 5.7%, down 0.4pp from September.
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