Commenting on the Office of National Statistics Consumer Price Index for September 2024,
Gora Suri, Economist at PwC, comments:
“Headline CPI inflation came in at 1.7% in September, dropping below the Bank of England’s target for the first time in three years, and adding to calls for another rate cut in November. This was mainly driven by downward contributions from motor fuels and air fares. Overall, this suggests we are very much at the end of the disinflationary process, which will be welcome news for policymakers and of course, consumers and businesses.
“Services inflation, the main area of concern, also fell considerably from 5.6% to 4.9%, and we are starting to see meaningful movement on wage growth, with annual growth in employee’s total earnings declining from 4.1% to 3.8%. All this is encouraging but upside risks to the headline rate remain, such as an increase in household energy prices and the potential for a spike in oil prices amid an escalation of conflict in the Middle East.
“The latest wage and inflation data is likely to further strengthen the case for a 25bp rate cut in November, especially considering the Bank’s increasingly dovish stance.”
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