IoD: Significant decline in inflation is a welcome ray of sunshine for business

Commenting on today’s data from the Office of National Statistics, that showed the annual rate of CPI inflation fall from 6.7% in September to 4.6% in October 2023, Dr. Roger Barker, Director of Policy at the IoD, said:

“Although this month’s sharp decline in inflation was already baked into the numbers, due to the downward adjustment of the energy price cap, it is still an encouraging development.

The rate of core inflation (excluding food and energy), which fell from 6.1% to 5.7%, is still relatively high. However, there was a noticeable easing of inflationary pressure across a range of categories of goods and services this month. This must give hope that higher interest rates are starting to work, and that they won’t need to rise further.

However, it’s probably unrealistic to expect rate cuts until well into 2024, given the continued tightness of the labour market and the stubbornness of inflationary pressures in some areas.”