UK inflation hits 2.3%
interactive investor comments on the latest figures.
20th November 2024 09:50
by Camilla Esmund from interactive investor
- UK Inflation accelerates in October, dashing hopes of a December interest rate cut
- Annual Consumer prices index jumps from 1.7% to 2.3%, coming in higher than expected
- Annual services inflation and core inflation both rise 0.1 percentage points to 3.3% and 5%, respectively
Commenting, Craig Rickman, Personal Finance and Pensions Expert at interactive investor, says: “The news that inflation nudged back above the Bank of England’s 2% target in October wasn’t a huge surprise. The Bank has repeatedly stressed that price rises are expected to accelerate in the second half of 2024, largely due to rising energy bills. However, a 0.6 percentage point increase is sharp, and with both services and core inflation speeding up last month, too, the prospect of a December interest rate cut looks faint. In a blow to borrowers who are crying out for lower interest rates to ease mortgage repayments, the Bank may hit the pause button and keep rates steady at its final meeting of 2024.
- Invest with ii: SIPP Account | Stocks & Shares ISA | See all Investment Accounts
“This development won’t be music to the new government’s ears, particularly after the Bank raised its inflation expectations for the next three years in response to Chancellor Rachel Reeves jacking up national insurance rates for businesses at the Autumn Budget.
“Inflation is in a much better place than the dizzying, double-digit heights that battered our finances a couple of years ago, but policymakers still need to keep a lid on it. When prices rise at a quicker pace, your savings and investments must work harder to grow in real terms. This is an important time to check how much you’re earning on your savings, and shop around for the best deals. The highest-paying accounts are still outpacing inflation, but the gap is narrowing. And this margin is likely to close further over the coming months with price rises set to continue speeding up.”
“When it comes to finding the right home for your money, if the financial goal you’re saving for is five years or more away, and you’re prepared to take some risk with your money, the stock market should offer a better option to grow your wealth and hedge against the threat posed by rising inflation.”
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.