Research Briefing | Oct 7, 2021

UK | Inflation to peak higher, but this is not the start of a new high inflation era

Inflation to peak higher, but this is not the start of a new high inflation era

Inflation in the UK is set to peak higher for longer than we previously expected. But structural factors plus the likelihood that supply problems will eventually be resolved mean we still think the spike will prove transitory.
We now think that CPI inflation will peak over 4% and remain above 3% until H2 2022. Rising petrol prices in the near-term and another hefty rise in energy bills likely next April will fuel the increase.

What you will learn:

  • We now think CPI inflation will reach over 4% early next year
  • A key factor in inflation rising faster than we expected has
    been energy. Petrol prices increased strongly over the
    summer
  • Localised price and wage rises and shortages should bring
    about more supply, at least in some areas

Back to Resource Hub

Related Services

Post

Why the consumer recovery is delayed, not derailed

Latest data point to a delayed start to a consumer revival in the eurozone, but we see relatively low risk of it being derailed. Even with a slow start, it's unlikely to throw the rebound off course – plus there's a chance of make-up growth in H2. We expect private consumption to grow 1.2% in 2024 overall.

Find Out More
Manufacturing

Post

Industrial production bottomed out in major developed economies

Our new proprietary cycle phase analysis suggests that industrial production in many developed economies has bottomed out and is now poised to enter a period of growth.

Find Out More