CBI responds to latest inflation figures - October 2023

Alpesh Paleja, CBI Lead Economist, said:

“Inflation has once again surprised on the upside by staying put in September. While we expect it to resume falling in the months ahead, the near-term outlook for prices is now more mixed. The recent rise in global oil prices may mean that the path back down is bumpier, and domestic price pressures are probably stronger than the Bank of England would like.

“Nonetheless, with surveys of wage growth softening more noticeably than official data, there are some reassuring signs that underlying inflationary pressures may be waning.

“Despite staying unchanged, inflation has once again come in lower than the Bank’s forecast. But the Monetary Policy Committee will be vigilant against the CPI rate moving sideways rather than firmly downwards, so it’s unclear if today’s data calls time on further rate rises. But either way, it’s still very likely that interest rates are close to their peak, with the stance of monetary policy now judged to be restrictive. The Bank has signalled that rates are unlikely to be cut anytime soon, however, so households and businesses should plan for tighter financial conditions persisting.”