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UK inflation ‘to stay below 1% into 2016’


The UK CPI measure of inflation is expected to stay below 1 per cent until the second half of next year, reflecting the “continuing drag” from commodity and other imported goods prices.

In its inflation report, published today, the BoE says the outlook for global growth has weakened since August as “many emerging market economies” have slowed “markedly”.

The report says: “While growth in advanced economies has continued and broadened, the committee nonetheless expects the overall pace of UK-weighted global growth to be more modest than had been expected in August.”

The MPC are convinced that inflation will return to the 2 per cent target within two years, as announced in the report in August.

The report also raises particular concerns about China. It says although the country is growing at a slow pace as its economy rebalances towards consumption,“there is significant uncertainty about how smooth that rebalancing will be and a risk that growth slows more sharply.”

The report states: “Recent developments in China have highlighted the challenges faced by the authorities of liberalising and rebalancing the economy. A sharp slowing in China could affect the UK economy through a number of channels, including through trade and financial interlinkages.”



Bank of England votes 8-1 to hold interest rates

The Bank of England has maintained interest rates at 0.5 per cent, and has kept its monetary easing program steady. The Bank’s Monetary Policy Committee voted 8-1 to maintain rates, with Ian McCafferty once again being the only dissenter, who wanted to raise rates by 25 basis points. The committee voted unanimously to keep the asset purchase […]


Five things to watch for on Bank of England’s Super Thursday

The Bank of England will release a bulk of information today, dubbing the day Super Thursday, but what should we be looking out for? Today will see the release of the latest interest rate decision; a press conference from Bank of England governor Mark Carney, minutes from the most recent Monetary Policy Committee meeting, the voting […]


UK inflation turns negative

UK inflation slipped into negative territory again in September, driven by the falling price of food and reduced motoring costs. The 12-month Consumer Prices Index inflation rate dropped to -0.1 per cent in September, down from 0 per cent in August. It is the second time the Office for National Statistics has reported negative inflation […]


Strong sterling cools BoE inflation forecast

The strength of sterling has played “a significant role” in the Bank of England’s thinking over inflation projections, says Axa’s David Page. The Bank said today the stronger pound trajectory over the past months could cause a delay in the rise of inflation in the UK. In its latest inflation report, released today, the Bank stressed […]

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(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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