Deutsche Bank expects UK inflation to rise in October

UK headline CPI is forecast to reach 3.80% year-on-year in October, according to Deutsche Bank economists Sanjay Raja and Maui Brennan. They expect energy and tobacco, alongside modest increases in food and services prices, to drive inflation higher, with Core CPI and Services CPI also set to rise. With price pressures remaining persistent, they anticipate headline CPI moving nearer to 4.25% early next year.

UK inflation set to rise again, Deutsche Bank forecasts

"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. Know more.)