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Forecasters suggest UK inflation could fall below 2% this year

Forecasters suggest UK inflation could fall below 2% this year

Economists are forecasting a sharp fall in inflation by the end of the year. The Bank of England previously estimated that inflation could fall to 4% in the fourth quarter of the year, but investment bank Citi said the consumer prices index (CPI) was likely to fall to 2.3% in November, while the fund manager Investec said it could slide to 1.6% by December. The predictions assume an easing in pricing pressures, particularly in energy, and a squeeze from higher lending rates on households. Martin Beck, chief economic adviser to the EY Item Club, said although such expectations are not implausible, they are put at risk by wage growth and further escalation in the war in Ukraine, which could push energy costs up again. A more rapid than expected rebound in Chinese demand for gas and other commodities could also push up prices, he added. The CPI stood at 10.1% last month.

Read more: The Guardian

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