United Kingdom inflation: Deutsche Bank sees further upside
Deutsche Bank economists Sanjay Raja and Maui Brennan expect UK inflation to move higher in October, driven by energy, tobacco and modest food and services gains. They forecast headline CPI at 3.80% year-on-year, with Core CPI and Services CPI also rising. Looking ahead, they see headline CPI pushing closer to 4.25% early next year, with price pressures remaining sticky.
Deutsche Bank economists Sanjay Raja and Maui Brennan anticipate UK inflation to increase in October due to rising energy, tobacco, and modest gains in food and services. They predict headline CPI to be 3.80% year-on-year, with Core CPI and Services CPI also increasing. Heading into next year, headline CPI may approach 4.25%, with price pressures persisting.
In October, energy prices, tobacco duty hikes, and their cumulative effect on inflation are the primary factors. The UK's inflation outlook, as per Deutsche Bank, features three key drivers: surging energy costs entering the year's final quarter, tobacco duty increases, and their impact on retail prices. Inflation is expected to rise to 3.80% y-o-y in October, with Core CPI and Services CPI also projected to climb.
As the year progresses, headline CPI is likely to near 4.25%, while services inflation may maintain its upward trajectory due to food price hikes and the trickle-down impact of higher energy costs on retail goods.
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