Yael Selfin, Head of Macroeconomics at KPMG in the UK, comments on the ONS Consumer Price Index (CPI) out today.
“The headline Consumer Price Index (CPI) was surprisingly subdued in October, with wholesalers and retailers absorbing the rising costs due to the lower pound.
“As a result, we now expect inflation to reach 0.7% on average in 2016, down from 0.8% previously, which is below the Bank of England’s latest forecasts and its 2% target.
“However, inflationary pressures remain. Prices of imported materials rose steeply in October, and manufacturing goods passed on these costs with additional price rises in October. We therefore still expect inflation to exceed the Bank of England target next year.”
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