Inflation comment from LiveMore

“Rather unexpectedly, CPI inflation fell by 0.2% in August, down to 9.9%. Now that the energy price cap has been reduced by the new government to £2,500 from October, inflation is expected to be dampened to some extent. However, this is almost twice as high as this time last year when the energy price cap was set at £1,277, so many people are still experiencing significant increases in their cost of living.

“It is inevitable that the Bank of England will raise base rate next week, the question is by how much?  The industry guess work is anywhere between 0.5% and 0.75%. Whatever the increase, let’s hope it’s sufficient to help contain inflation and avoid tipping the base rate environment into territory not seen for 14 years.”

Simon Webb, managing director of capital markets and finance at LiveMore