ONS Monthly Inflation figures – comment

“Today’s inflation figures increase the likelihood of an interest rate cut following the next Bank of England (BoE) Monetary Policy Committee meeting. With consumer prices growing by the slowest pace in three years, and Brexit uncertainty and global headwinds continuing to impact the outlook for the British economy, calls for more monetary stimulus to reach the BoE’s 2% inflation target are likely to intensify.

“In the short term, the low inflation rate will have a positive impact on for households as wage growth continues to outstrip inflation by a comfortable margin. At the same time, an interest rate cut will help indebted households and companies to meet their repayment obligations. The latest Dun & Bradstreet UK Industry Report shows that there were 12,308 corporate liquidations in Q1-Q3 2019, down by 1.1% in a year on year comparison. At the same time, the percentage of payments made on time has risen from 35.9% in December 2018 to 44.7% in September 2019 based on analysis of available data. As a result, the average payment delay for B2B payments in the UK (13.5 days) is now more in line with the European average (13.4 days).”

Markus Kuger, Chief Economist, Dun & Bradstreet