Will UK inflation rise in October as Deutsche Bank expects?

UK price pressures are expected to remain sticky, with Deutsche Bank economists Sanjay Raja and Maui Brennan forecasting a rise in October inflation as energy and tobacco prices climb alongside modest increases in food and services prices. Their headline CPI forecast stands at 3.80% year-on-year, while Core CPI and Services CPI are also expected to increase. They anticipate headline CPI moving nearer to 4.25% early next year.

Why Does Deutsche Bank Expect Renewed Inflation Pressures?

"After broadly matching expectations in September, we expect UK inflation to rise further in October."

"First, energy prices are set to push even higher as we enter the final quarter of the year, with the Ofgem Price Cap up, heating oil prices up, and petrol and diesel prices up too. Second, tobacco duty will also be a prominent feature of the October inflation report, with higher duties on vapes and tobacco kicking in."

"We expect headline CPI to have risen to 3.80% y-o-y (Sep-26: 3.48%). Core CPI, we think, will have jumped by 2.87% y-o-y (Sep-26: 2.78%). Services CPI, we project, will have edged up to 3.87% y-o-y (Sep-26: 3.72%)."

"We continue to see headline CPI pushing closer to 4.25% y-o-y at the start of next year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)