CBI responds to latest inflation data

Alpesh Paleja, CBI Lead Economist, said:

“Inflation fell again in August, defying expectations of a slight uptick. We expect inflation to continue falling over the rest of this year, but the recent uptick in global oil and domestic fuel prices means that the path back down may now be bumpier.

“Despite the latest fall, the Bank of England will still be concerned by signs of stubbornly high domestic price pressures. As a result, another rise in interest rates tomorrow still looks more likely than not, though changes to monetary policy beyond this will be very data dependent. But with the MPC suggesting that rates will remain higher for longer, businesses and households should plan for tighter financial conditions being here to stay.”