Inflation is currently at its lowest level in three years, but is expected to increase
Inflation is set to rise back above the Bank of England’s target level when the latest figures are revealed on Wednesday, according to economists.Pantheon Macroeconomics forecasts CPI will hit 2.2 per cent, Capital Economics believes it will hit 2.1 per cent, and Deutsche Bank forecasts it will hit 2.07 per cent, which would be rounded to 2.1 per cent. They all believe inflation will rise further in future months.
Ministers insist it was necessary to hike taxes in the recent Budget in order to avoid cuts to public services and say they will now focus on boosting living standards by speeding up economic growth. But they face uncertainty after the election of Donald Trump, who has proposed a number of policies which economists believe would destabilise global trade and supply chains.
“Administrative tax changes as per the Autumn Budget have raised our forecasts by nearly 0.1 percentage points in 2025. And there’s some upside brewing given the indirect effects of the large fiscal package announced as part of the
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