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Inflation begets rate rises

The UK’s Consumer Prices Index (CPI) – which measures the average price of various goods and services – recorded a yearly change in September of 3.1%, just below analyst forecasts of a 3.2% advance.

21 October 2021

While this is still a sticky inflation number, it is marginally down from the previous month’s rolling yearly figure of 3.2%. It is however unlikely to alter the widely expected view that Bank of England policymakers will hold off raising rates to 0.25% at their November meeting. Inflation begets rate rises and this is ultimately the only blunt tool to help cool it and the only tool left to policymakers if we are to believe their transient inflation messages of earlier this year.

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Charles Hepworth

Investment Director
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