RSM UK’s Post

The dip in inflation in December is welcome news, but it won't last long. Inflation will hit 3% in the spring. Inflation ticked down to 2.5% in December rather than staying at 2.6% as expected. This is welcome news for the Bank of England and makes an interest rate cut in February even more likely. However, most of the drop last month was due to a a big drop in airline fare inflation, but this has much more to do with when the ONS samples prices (it was early in December this year so prices tend to be lower) than any drop in underlying price pressures. Inflation will rise sharply over the next few months as firms pass on the huge increase in labour costs imposed on them in the budget, tax rises come into force and energy prices rise again. We see inflation rising to around 3% in the spring, before gradually falling back to 2% in early 2026. That means the Bank of England will have to be cautious about cutting interest rates, but it still leaves scope for at least three rate cuts this year. #RSMUK #RealEconomy #Inflation

Outlook for the Spring is not looking very good. "Inflation will rise sharply over the next few months as firms pass on the huge increase in labour costs" 

Inflation fell to its lowest level since 2021 in February, but is it enough? The Bank of England forecast that inflation would experience a larger decline in February, suggesting that its plans to lower the cost of borrowing may be pushed back to accommodate. Although food and drink prices contributed most to February's decline, fuel and service prices offset the final figure by remaining high. Article: The Guardian #Inflation #CostOfLiving #CostOfLivingCrisis #CCGEyeOnIndustry

The rate of inflation stands at 2.2% in August, the Office for National Statistics said, unchanged from July. The announcement comes the day before interest rate setters at the Bank of England decide on the cost of borrowing. Markets are expecting only a 26% chance of an interest rate cut. But another measure of inflation ticked unexpectedly up - core inflation rose to 3.6%, even higher than economists had forecast. Bank officials closely watch core inflation as it gives a reading on price rises without elements like food and energy which are prone to rise and fall quickly. A rise in core inflation to 3.5% had been anticipated. An increase was also seen in services inflation which rose from 5.2% in July to 5.6% in August. This measures encompasses the culture and hospitality sectors. #news #updates #ons #inflation #boe #interestrates #uk #unitedkingdom #august #importer #smallbusiness #businessowner #costofliving

📉 Inflation dropped to 1.7% in September, marking its lowest level in over three years and falling well below the Bank of England’s 2% target! A decline in fuel prices and transport costs, particularly airfares, contributed to this drop, raising hopes for a potential interest rate cut in November. However, rising food prices and the recent energy cap increase may cause inflation to edge up in the coming weeks. All eyes are now on the Bank of England’s base rate decision on 7 November. Will another cut be on the horizon? Time will tell. https://buff.ly/3A5q1ZP #InflationUpdate #BankOfEngland #Economy #InterestRates #Accountants

It's all about services inflation for the BoE - what to watch for.... The Bank of England's recent 25bps rate cut, though cautious, maintains a hawkish tone due to persistent inflation risks.The one dissenting voter, Catherine Mann, is vocally concerned about services inflation. Governor Bailey also emphasized services inflation as a critical factor for reaching the 2% CPI target. If services inflation continues to miss expectations, it can trigger GBP weakness, as it implies further delays in controlling inflation. The BoE’s gradual approach to rate cuts reflects ongoing inflation concerns, particularly within services, signalling a slow pace for easing while closely monitoring economic data and budget impacts. Weak GDP, Labour, or CPI data too can also weigh on the elevated GBP moving forward. #BOE #GBP #GBPUSD

Headline inflation (CPI) has finally hit its target. But will this mean a cut tomorrow? Unlikely. The fall to 2% was widely led with clothing, recreation and restaurants and hotels all contributing and with food inflation reducing to 1.7%. However, a word commonly used when discussing inflation at the moment, services inflation remains high and sticky. It only fell by 0.2% to 5.7% which is above the Bank of England forecast of 5.3%. So, concerns on persistent price pressures remain and with wage growth still at elevated levels the fall back is likely to be slow in coming. What does that mean for bank rate cuts – well tomorrow seems very unlikely; August remains a possibility given rates are in restrictive territory, but June’s inflation print and wage growth data will be key to that assumption. The wait is still on.

⬇️ Inflation dropped to 3.2% in March from 3.4% in February - the pernicious ‘invisible tax’ had been running hot at 11.1%, the highest in six decades, just 18 months ago. The Bank of England does need to consider bringing down the 16-year high interest rate of 5.25% to at least 5% in the first instance and quickly. After all, a spoonful of sugar makes the medicine go down… #inflation #ukeconomy #business

Inflation eases to 3.2% - lowest level since 2021! Great news! Official figures from the Office for National Statistics reveal that inflation has dropped to 3.2%, down from 3.4%. While economists predicted a fall to 3.1%, this is still a significant improvement. But what does this mean for you? It's important to note that while prices are rising at a slower pace, they are not coming down. So, what's next? All eyes are now on the Bank of England as they prepare to make a crucial decision. Will they consider cutting interest rates next month? Stay tuned to find out! #contractor #contracting #contractors

Sharp drop in inflation to 1.7% For the first time in more than three years, inflation has decreased to 1.7%, almost half a percentage point below the Bank of England's goal. This surprising and positive decrease was not anticipated by economists who had forecast a rate of 1.9%, sparking optimism that the Bank might lower the base rate of 5% by 0.25% during its meeting in early November. Inflation decreased due to lower fuel and transportation costs, especially for air travel, which had seen a rise over the summer. However, the increase in food and soft drinks contributed to the rise in inflation, with a 1.8% increase in prices, mainly due to higher costs of dairy and fruits. #Inflation #BankofEngland #Rates #Money #Finance #Costs #economy #Priceincrease #Tax