The inflation rate was 2.3 per cent in the year to October, up from 1.7 per cent in September. Given that the Bank of England’s target is 2 per cent, you might think that this has squashed the case for any further rate cuts. But (as ever with economics), the devil is in the details.
The latest uptick in inflation was largely driven by a 9.5 per cent increase in the Ofgem utility price cap. It might feel like a blast from the past, but energy prices will continue to influence the inflation rate in 2025. Forecasts from consultancy Pantheon Macroeconomics suggest inflation will rise to 2.6 per cent next month and approach 3 per cent in the spring as duty hikes and movements in utility prices feed through.