Uk September Cpi Remains Unchanged

 Uk September Cpi Remains Unchanged

UK September's CPI Remains Unchanged At 6.7%

The CPI reading for the UK remains unchanged during September and suggests that the inflationary pressure is still strong. Just like August's reading, last month's value came out to be 6.7%, which is an 18-month low. But we also need to remember that it is still higher and is at a multi-year high.

According to the forecasts, the UK's inflation was expected to drop in September to a reading of 6.6% (-0.1% change). However, it appears that no change happened to the core inflation for British consumers.

Interest Rates Will Remain Unchanged

After the reading, the Bank of England will likely make no changes to its interest rate policy as well. So, on the 2nd of November, the interest rate will likely remain near 5.25% with no change at all.

During the September meeting, the BoE also made no changes to the interest rate as the inflation rate dropped significantly in August.

In October 2022, inflation in the UK peaked at 11.1% as it touched a 41-year high. Although the inflation has now gone down to 6.7% (-4.4%), it is still quite high, and UK consumers are feeling inflationary pressure.

Last year, the major factors that led to the high inflation rate were the Russia-Ukraine tension and the high energy prices. In addition, the labor market was also going through a worker shortage due to the COVID-19 pandemic.

As per the Bank of England's forecast, the inflation will stay higher than the 2% target in the next 2 years as well. By the end of 2025, the bank is hopeful that it will reach the 2% target or fall below it.

In the UK market, the two factors that are closely linked to each other are the CPI and the interest rate. The higher interest rates have provided a much-needed boost to the GBP, but it has come at the cost of slow economic growth. In addition, consumer demand has also deteriorated due to the higher interest rates.

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