PREVIOUS TRADING DAY EVENTS 18 Oct 2023

The U.K.s yearly inflation figure was reported higher than expected at 6.7 in September, remaining the highest of any major advanced economy. This raises the possibility that the BOE will keep rates elevated or even proceed to hike rates in the near future.

Petrol prices kept rising between August and September and this was the main factor pausing a fall in the annual rate.

Progress in bringing inflation down is proving slow, said Ian Stewart, chief economist at accountancy firm Deloitte. The persistence of underlying inflation, and service price pressures, suggests that interest rates are likely to stay close to current levels for much of the next year.

We expect the MPC to remain on hold this year, but to continue to push back against any rapid cuts, Morgan Stanley economist Bruna Skarica said, adding that she expected rate cuts to begin in May 2024 or slightly later.

Consumer prices in Britain have risen 17 in the past two years, an increase that would normally take almost a decade. Wednesdays data showed core inflation fell less than expected to 6.1 in September from Augusts 6.2. Services price inflation increased to 6.9 in September from 6.8.

The Dutch bank ING forecasts British inflation would drop to 5 or lower in October and hold near that level for the rest of the year, assuming no significant further rise in oil prices.

Source httpswww.reuters.comworldukukinflationrateholds67september20231018

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