Forecaster says inflation will be higher, then lowerpublished at 13:30 Greenwich Mean Time
As we mentioned a little earlier, the Office for Budget Responsibility (OBR) published its fiscal outlook just as the chancellor finished delivering her Spring Statement.
Included is its altered prediction for the pace of prices rises in the UK from the autumn Budget.
Basically, it now thinks inflation will be higher in 2025 due to a peak in wholesale gas prices and higher oil prices.
But then inflation will be lower “as energy prices drop, food price inflation falls, and wage growth eases back,” the OBR says.
The forecaster now thinks inflation in 2025 will average 3.2% before “falling rapidly” to 2.1% in 2026, and reaching the Bank of England’s 2% target from 2027 onwards.
The OBR had previously said inflation would be 2.6% in 2025, 2.3% in 2026, and 2.1% in 2027, finally falling to 2% in 2029.
