Inflation of 0.4% after Chancellor Rishi Sunak’s Eat Out to Help Out deal ends
Inflation is expected to rise to 0.4 percent in the statistics released this week.
The surge in the consumer price index in September – which was 0.2 percent in August – will partly reflect the end of the Eat Out to Help Out meal discount program.
Rise: The sharp rise in the consumer price index in September partially reflects the end of Rishi Sunak’s Eat Out to Help Out meal discount scheme
This relatively modest rise is expected to be followed by a much more substantial rise next year, according to the ITEM forecasting club, which uses the Treasury’s computer model of the economy.
And two top economists predict that UK inflation could return to annual rates of five to 10 percent in the longer term.
Charles Goodhart, ex-member of the Bank of England’s Monetary Policy Committee, and Manoj Pradhan, ex-executive of Morgan Stanley, say the spike will be fueled by more bargaining power for labor as globalization turns after Covid – with reluctant central banks to raise interest rates.
On average, urban and academic economists predict that the CPI will increase from 0.8 percent this year to 1.5 percent next year.