No change at the Bank of England as inflation – and likely interest rates too – hold steady 18 September 2024 A big week for the Bank of England is likely to result in nothing much changing – with CPI holding steady at 2.2 per cent, and interest rates likely to remain at 5 per cent, the Resolution Foundation said today (Wednesday). CPI inflation held steady in August, with the second-biggest monthly rise in airfares on record (since 2001) and slower falls in second-hand car prices offset falls in hotels and restaurant prices. Disappointingly, the closely-watch services inflation rose to 5.6 per cent after a surprise dip last month. The Foundation notes that inflation is set to be volatile in the coming months with Bank of England forecasting a fall of 0.3 percentage points in September’s CPI data, which is critical as it used to uprate working-age benefits next year, before inflation jumps up in October as previous energy-bill falls drop out of the calculation. Lalitha Try, Economist at the Resolution Foundation, said: “Inflation held steady in August, with even Taylor Swift’s arrival in London failing to move the dial on price changes. Disappointingly, services inflation rose after a surprise fall in July, with prices now back in line with the Bank’s expectations. “Amid a busy period for central banks, with the Fed gearing up for its first interest rate cut in years following a cut by the ECB last week, it’s likely to be a steady-eddie week for the Bank of England.”
