Inflation comment from LiveMore

18 October 2023

Simon Webb, managing director of capital markets and finance at LiveMore, commented: “The annual Consumer Prices Index (CPI) inflation has stalled again and remained stubbornly at 6.7% in September. But other elements of the inflation figures have also not budged.
“The Consumer Prices Index including owner occupiers' housing costs (CPIH) also stayed where it was last month at 6.3% as did core CPIH at 5.9%, which excludes energy, food, alcohol and tobacco. The only minor shift downwards among these four inflationary figures was core CPI at 6.1%, down from 6.2% in August. This was mainly due to goods such as food falling slightly but services like transport were up.

“Whether this is enough to stave off another base rate rise next month is debateable and no doubt the next Monetary Policy Committee meeting will be a hive of debate. The last meeting was as close as it gets with members voting 5 to 4 in favour of keeping base rate at 5.25%. With average wage growth exceeding inflation, for the first time in nearly two years, the MPC may decide to raise rates again, which is not what we want to see.”