Bank of England governor says CPI inflation will drop 'noticeably' in October

20 October 2023 , 14:42

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Inflation appears likely to resume its recent trend of slowing down after an unexpected pause last month (Image: PA Wire/PA Images)

The Bank of England's governor has predicted a significant drop in UK inflation for October, as efforts continue to combat the rising cost of living.

Andrew Bailey suggested that inflation will resume its recent trend of slowing down after an unexpected pause last month left it at 6.7% in September.

Mr Bailey, during a visit to Northern Ireland, told the Belfast Telegraph that he anticipates a "noticeable drop" in the inflation rate due to a comparison against sharp energy price increases seen over the same month last year.

He emphasised that Wednesday's higher-than-expected headline inflation rate hasn't derailed the central bank's attempts to reduce inflation. "It was not far off what we were expecting," Mr Bailey said.

He also pointed out that wage inflation needs to significantly decrease for inflation to return to the Bank's 2% target rate.

Shop prices 'are yet to peak and will remain high' as inflation hits new heights

This comes after the ONS reported on Tuesday that wages have exceeded inflation for the first time in nearly two years with a 7.8% growth in the three months to August.

On Friday, Mr Bailey stated: "Pay growth as measured is still well above anything that's consistent with the (inflation) target." He also added: "I understand, though, that people will want to see the evidence that inflation is coming down. I think we can see that evidence."

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Steve Charnock