In the latest economic update, the Office for National Statistics (ONS) released its newest Consumer Price Index (CPI) data, painting a picture of what is happening in terms of inflationary trends and the broader economic landscape. Commenting, Abhi Chatterjee, Chief Investment Strategist at Dynamic Planner said:
“At last, some good news for the beleaguered consumer. Inflation, as measured by the Consumer Price Index, fell below the Bank of England target to 1.7% in 3 years. Better still, the print came in lower than was expected by practitioners. The downward move was from transport, fuelled by lower air fare and petrol prices. At the back of a cynic’s mind, is also the Middle East crisis, which has caused crude prices to rise as well as the rise in the Ofgem energy price cap rise for households – these have a potential to reverse the decline in inflation.
“Notwithstanding, this comes as a welcome boost to both consumers as well as the Government as it heads into its Budget, promising to do everything to “galvanise growth”. The Bank of England also gets a bit of a breathing room allowing it to take steps to begin the easing cycle in earnest. With the possibility of a rate cut by the Central Bank in November almost a certainty, it would not be too much of a leap of faith to expect another in December, should the trend in inflation continue.”
Abhimanyu Chatterjee is Chief Investment Strategist at Dynamic Planner. Abhi leads Dynamic Planner’s team of analysts, who are responsible for asset allocation and for the Dynamic Planner risk model. Read more about Abhi here
