19 April 2023
If you are covering the latest inflation data from the Office for National Statistics, please find below a comment from Marcus Brookes, chief investment officer at Quilter Investors:
“Having surprisingly jumped last month, inflation has once again started its slow march down from the double-digit growth we have become accustomed to. However, we are still not below the 10% mark, a level we have not been at since August, what now seems like an age ago. This inflation problem is persisting and the fact is it remains at eye watering levels. With fairly punchy estimates and the government hitching its wagon to halving inflation by the end of the year, it will be hoping it falls at a faster rate than just a few decimal percentage points each month.
“Nevertheless, consumer confidence is beginning to return and the economy may not be as harmed by this cost of living crisis as first feared. For as long as the economy can hold up, the Bank of England will keep the option of interest rate rises firmly on the table. With the headline rate of inflation eventually coming down to hopefully more palatable levels, there will be an increased focus on what is going on under the bonnet with core inflation. This measure failed to shift in March and this will be a real concern to the BoE. Should that fail to fall meaningfully in the next couple of months, then more aggressive monetary policy from the BoE may be required yet again.”
