UK Inflation Rate Expected To Fall
A drop in the rate of inflation to a six-month low are set to be portrayed in the new official figures. Just 24 hours before the Bank of England releases an essential economy report of UK, the Office for National Statistics (ONS) information came out on Tuesday. The main aspect behind the expectations for the Consumer Prices Index (CPI) is the drop in prices of petrol. And the rate shows that in October it was 2.5% down from the September rate of 2.7%.
However, to illustrate the predicted future plans of the interest rates which as we speak are 0.5% low, the Bank is keeping a close eye on the Inflation Report aims. Policymakers last year indicated that the economy is growing rapidly than it was expected in the previous quarter inflation report, add a boost to the upgrading of the forecasts and unemployment was dropping too.
Basically, the ONS numbers portray inflation of above 2% and this will cause a stiff in the incomes as the cost of living is rising. The inflation is expected to keep dropping from June’s 2.9 %. In April the rate was 2.4%. Some analysts from Barclays have the view that they expect the rate to drop to 2.6% and Scotiabank’s Alan Clarke expects a 2.4 drop, by adding a smaller amount from the tuition fees from universities and slowing the food inflation.
A 2.5% rate was predicted by IHS Global Insight’s Howard Archer with illustrations of high street retailers slashed prices during October. However, the projections for inflation as well as unemployment and the economy will be illustrated on Wednesday in the Bank’s report. Following the inflation report of the previous quarter when the Bank released the new guidance policy, the job information has certainly become the most significant signifier.
However, the markets are expecting that these problems are solved soon and they have released an interest rate increase for a year earlier. Policymakers have been going through a lot of strain reaching the 7% threshold which will not be an automatic trigger for rates increase.
However, any drop in the inflation from the Bank’s inflation report is supposed to ease the fears that it will increase to a level that should provide a knockout to the low interest rate policy.
