Rishi Sunak might get some much-needed good news on Wednesday if predictions of UK inflation numbers are accurate
Having stated inflation would halve by the end of 2023, the embattled PM might just get his wish if economists are right.
Data recently showed food price inflation in single digits for the first time in 16 months but it is falling energy prices which are likely to be the main driver behind a decrease.
Goldman Sachs (NYSE:GS) economists expect the print to show both services and core inflation declining by two-tenths to 6.7% year-on-year, below the Bank of England’s projection of 6.9%, and 5.9% respectively.
“Taken together with the fall in the Ofgem's price cap for average household energy bills in Q4, we expect headline inflation to decline meaningfully to 4.7% (from 6.7% in September), a tenth below the BoE's projection of 4.8% year-on-year,” the Goldman team said.
Food, alcohol, and tobacco inflation will decline to 10.6%, from 11.8% in September and energy inflation will decrease to -16.7%, from -0.2% in September.
True, the fall in Ofgem's price cap for average household energy bills in the fourth quarter accounts for most of this, but Sunak and Chancellor Jeremy Hunt won’t care.