Investment Clock insights

3% inflation won't have come as a surprise to the BoE


Ian Kernohan 

17 October 2017

Consumer Price Index (CPI) inflation rose to 3.0% in September, on the cusp of letter writing territory.  While this is higher than expected in the August Inflation Report, the Bank of England’s (BoE’s) Monetary Policy Committee (MPC) did signal in the last set of minutes that CPI would rise to 3% by October, so this won’t have come as a surprise to them.  
We expect the MPC to raise interest rates at the next meeting in November.  Inflation should fall back next year, as the effect of sterling devaluation begins to ease.

Consumer Price Index (CPI) inflation rose to 3.0% in September, on the cusp of letter writing territory.  While this is higher than expected in the August Inflation Report, the Bank of England’s (BoE’s) Monetary Policy Committee (MPC) did signal in the last set of minutes that CPI would rise to 3% by October, so this won’t have come as a surprise to them.  

We expect the MPC to raise interest rates at the next meeting in November.  Inflation should fall back next year, as the effect of sterling devaluation begins to ease.

Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.