Inflation is likely to only slowly abate over the coming year, according to the latest predictions from City economists. One of our panel of economic forecasters sees RPI inflation remaining at similar levels for most of the coming year, and another thinks it will rise a little before coming down later in 2018. Continue reading Forecasts indicate gradual drop in inflation levels
The latest instalment in the debate over which inflation indicator is the most appropriate for uprating benefits such as pensions took place in the High Court in January. The case, brought by telecoms firm BT, was that the company should be allowed to change provisions for uprating pension payments from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI), on the basis that the former had ‘become inappropriate’, according to the rules of the scheme. The case has implications for setting pay as well as pensions.
All of our panel of City economists see RPI inflation peaking in the next month or two and thereafter coming slowly down. Our rounded average of the predictions from seven City forecasting bodies shows the RPI, which is currently at 4% for the year to October, falling to 3.6% in the year to February. The February figure will be released in mid-March and as such will be the extant measure when many companies’ April 2018 pay reviews take place.
Inflation could rise to just below 4% on the all-items RPI measure by the autumn, according to our panel of City economists. Thereafter it could fall, but slowly. This assessment is based on our rounded average of the predictions from eight forecasters. The panel divides evenly between those who see RPI reaching 4% and those who think it is unlikely to rise this far. The main point of difference is based on whether the upward pressure on import prices from sterling’s previous depreciation, following the vote to leave the EU, have mainly worked through, or whether most of these effects remain to be felt. Continue reading Forecasters think inflation could rise to just below 4% by autumn
Our latest analysis of trends in pay awards shows that private sector settlements have risen from 2% to 2.4% at the median, mainly as a result of companies acting to raise rates at the lower end of their pay structures to bring them into line with the new statutory minimum rates. Continue reading Viewpoint: Pay squeeze in sharper focus than before
The latest inflation figures from the Office for National Statistics (ONS) show that the all-items RPI inflation figure stood at 3.1% in the year to March, having risen sharply from 2.6% to 3.2% in the year to February. Continue reading RPI inflation dips to 3.1% in March
Inflation forecast to rise to 4% by late summer
After the sharp rise in RPI inflation in the year to February, economic forecasters have had to revise their assumptions about the likely path of inflation. Inflation rose to 3.2% in the year to February, up from 2.6% in the year to January. The increases were higher than predicted, and were due to increases in prices for oil and petrol on the one hand, and food on the other. In the case of food prices, increases are mainly caused by the impact of sterling’s depreciation.
The cost of living as measured by the all-items Retail Prices Index (RPI) rose to 3.2% in the year to February, up from 2.6% in the year to January, according to the latest data from the Office for National Statistics (ONS).
The main upward effect came from motoring expenditure – Continue reading Inflation rises sharply in March data from ONS
Inflation is predicted to rise steadily between now and the autumn, potentially peaking at a little below 4% on the all-items RPI measure before slowly coming down, according to our panel of City economists. Continue reading RPI inflation set to rise to 4% by autumn before starting to fall
With the winter holiday season almost at hand, two recent news items caught our eye. One is that trained chefs, an important component of the festive labour market, are in short supply. Continue reading Viewpoint: Not enough cooks spoil festive season outlook