CBI responds to latest inflation figures

Alpesh Paleja, CBI Lead Economist, said:

“A big fall in inflation was widely expected in July, given the 37% cut to Ofgem’s energy price cap. However, the Bank of England will be more concerned about signs of persistent domestic price pressures. In particular, the latest data points to continually strong wage growth, which means that more interest rate rises are in the pipeline.

“Inflation will continue to fall through the remainder of this year. While this is welcome news for households, the Bank has been clear that they’re willing to keep interest rates higher for longer if needed, to reign in price pressures. So, at least for the time being, tighter financial conditions for households and businesses look like they’re here to stay.”