New concerns for the Bank of England over inflation: latest figures should show that prices remain stubbornly high
Inflation figures due this week should show that prices remain stubbornly high.
The consumer price index (CPI) measures inflation at 10.5% in December.
Forecasters say it may have fallen slightly in January, but remained above 10%. This could pose a headache for the Bank of England’s Monetary Policy Committee (MPC) as it strives to bring the CPI back to its 2% target.
Counting the cost: Inflation numbers should show prices staying stubbornly high
The figures come after it was confirmed on Friday that the UK had narrowly avoided recession due to its growth in the fourth quarter of 2022.
Samuel Tombs of Pantheon Macroeconomics said the latest inflation data “will likely make MPC members cringe”.
Bank of England Governor Andrew Bailey said the UK had “turned the corner” in tackling inflation, saying it would fall to 4% by the end of this year.
Signs that the battle is proving to be an uphill battle will give ammunition to MPC ‘hawks’ demanding further interest rate hikes.