Why BOE base rate to fall so slowly?

Jaco70

dunstonh said:

The trouble is that people still feel good and are spending, giving more pension tax breaks helped that.

There has been no change in the pension tax rules apart from the LTA but that won't have made any difference.

Thank you for your reply. I agree with you regarding inflation taking a long time to get back down, but I clearly remember Jeremy Hunt saying, during his mini budget or whatever it was called, that it could be between 3 and 4% by the end of 2023. Nobody is saying that now, and he doesn't seem to be commenting on why his forecast was way out.

You cannot predict the unpredictable.  The modelling suggested that as energy costs fell, the rate of inflation would fall.  However, other issues have kept it higher.   However, the UK economy, is more prone to inflation given its industry make up.

"You cannot predict the unpredictable".......

But he did though didn't he........when he said it would fall to between 2 and 3% by the years end.

That's kind of my point.

Strummer22

dunstonh said:

The trouble is that people still feel good and are spending, giving more pension tax breaks helped that.

There has been no change in the pension tax rules apart from the LTA but that won't have made any difference

£60k annual allowance up from £40k too. If anything though, that results in more saving (high earners putting more into their pension to get the tax breaks).

ader42

Silvertabby said:

The long term norm is 5%.  It's the ultra low levels over the past few years that were the anomaly, not the recent increases.

Actually the average BOE base rate from 1971 to 2023 is 7.11%