UK CPI preview: Forecasts from four big banks, promising developments

The UK will release Consumer Price Index (CPI) data on Wednesday 18 October at 06:00 GMT and as we get closer to release time, here are the forecasts from UK economists and researchers. four major banks on upcoming UK inflation print.

The headline CPI is expected to decline to 6.5% year-on-year compared to 6.7% in August, while the underlying is also expected to fall two points to 6%. If so, headline inflation would be the lowest since March 2022, but would still be well above the 2% target.

Nomura

We expect headline and services inflation to remain unchanged between August and September (at 6.7% and 6.8% respectively), but we see a small drop in core inflation from 6.2% to 6.1%. 0.2pp. Looking ahead, we expect headline inflation to fall to just under 4.5% at the end of this year, just over 2.5% at the end of next year, and slightly below the 2% target at the end of 2025. As for underlying, we place it at 5.8%, 3.0% and 1.9% by the end of 2023, 2024 and 2025, respectively.

TDS

We expect September inflation data to mirror August’s, with a headline rate of 6.7% year-on-year and an underlying rate of 6.1% year-on-year. The Monetary Policy Committee’s attention will continue to focus on the services figure, and here we see that the year-on-year rate remains 20 basis points below the Monetary Policy Committee’s forecast (TDS: 6.8% year-on-year, BOE: 7.0%). Overall, fresh signs of improving inflation and, more importantly, the lack of a rebound following the significant downward ruling in August, would continue to suggest that the Monetary Policy Committee will hold interest rates on hold at its meeting. of November.

Deutsche Bank

We expect the September CPI to decline slightly to 6.61% year-on-year and the underlying indicator to decline to 6.0%.

SocGen

We believe that the disinflationary trend should continue in September, with a fall in general inflation of 0.2%, to 6.5%, and of underlying inflation of 0.2%, to 6.0%.