Inflation outlook rocky after unchanged result

Economists have said the direction for inflation remains uncertain after a lull last month.

Official figures yesterday showed that the Consumer Prices Index (CPI) held steady at 2.4 per cent in October, as higher prices for utilities and petrol were offset by a fall in food and clothing costs. A modest increase to an annual rate of inflation of 2.5 per cent had been on the cards.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said the longer term outlook was now dependent on the outcome of the UK’S withdrawal from the EU.

“Brexit is still the elephant in the room when it comes to the future path of inflation, and consequently of monetary policy. That’s because the pound now waxes and wanes with the Brexit negotiations, and that has a big impact on how much UK consumers pay for imported goods.”

Pwc’s senior economist Mike Jakeman said inflation was likely to continue to cool.