KPMG comments on today’s inflation figures

“Falling inflation may not be enough to change the course of monetary policy,” says Yael Selfin, Chief Economist at KPMG UK.

“Lower energy prices and the downward base effect from last year’s spike in oil and gas prices are expected to see inflation falling sharply this year. This could bring inflation back to target early next year.

“With the end of the inflationary menace on the horizon, the Bank of England is under increasing pressure to change its course by ending the current tightening cycle. However, continuing strong wage pressures add to the risk that inflation becomes more entrenched and persistent, making the Bank more reluctant to pivot to a new strategy.

“January headline inflation fell for the third month in a row to 10.1% from a high of 11.1% in October 2022.”

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KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022.  

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