Inflation predicted to fall to 2.9% by end of year.

kuratowski

Zaul22 said:

They say that as month after month goes by and it never goes below 10%. 

If we had a really big hike in prices for just one month, it would stay in the figures for 12 months.  That's just how the figures are reported.

I'm not saying that the OBR or BOE are right though.

Xbigman

Here's the historic inflation figures.

You can see that inflation went up by about 5% between Feb 22 and Oct 22. Once that rise drops off inflation should be down to 5% by Oct. If energy prices drop notably and food drops back a bit I could see 2.9% being possible. Maybe not likely but certainly possible.


Darren

Xbigman

I forgot to say that I think we'll all be worried about deflation in 18 months.


Darren

sevenhills

If the OBR cannot be trusted because of vested interests, what are other experts predicting, as opposed to random people online?
With salaries at around 5% is 3% likely?

RG2015

sevenhills said:

If the OBR cannot be trusted because of vested interests, what are other experts predicting, as opposed to random people online?
With salaries at around 5% is 3% likely?

It is not a question of trust and no expert is any better than any other. I have my own prediction which would be useless for anyone else.

But I also take the view that you should hope for the best but plan for the worst. Don’t forget that what is important for you is your personal inflation rate, not what the ONS say.

OldScientist

Xbigman said:

Here's the historic inflation figures.

You can see that inflation went up by about 5% between Feb 22 and Oct 22. Once that rise drops off inflation should be down to 5% by Oct. If energy prices drop notably and food drops back a bit I could see 2.9% being possible. Maybe not likely but certainly possible.


Darren

Also interesting to look at the month-on-month inflation figures (derived from the CPIH data at https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l522/mm23 ) and expressed as percentages.

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2020	-0.18	0.28	0.00	0.00	0.00	0.18	0.37	-0.37	0.37	0.00	-0.09	0.27
2021	-0.09	0.09	0.27	0.64	0.54	0.36	0.00	0.63	0.27	0.89	0.62	0.53
2022	-0.09	0.70	0.95	2.15	0.59	0.67	0.58	0.50	0.41	1.64	0.40	0.40
2023	-0.40

The largest monthly increases occurred in April and October 2022 (presumably related to the energy price cap). Also interesting to note that there was a drop in CPIH every January (January sales? Post Christmas wallet exhaustion?).

Like everyone else, I have no idea what the annual rate will be by the end of this year, but, in the absence of further price shocks in basics like energy, food, etc, the current underlying monthly rate of 0.4-0.5% translates to an annual rate of about 5-6%. Of course, a few more negative months like January will bring that down further.