Projection that we present today is very much into parts. Im going to begin with the first part. Starting near term outlook. This chart shows the evolution of Consumer Price inflation and its components since 2018. It shows that inflation has come off the peak in october last year and that it continues to fall over the rest of this year in our near term projection. Thats the piece showed in the shade of part of the chart. This fall can be attributed in large part to a full on contribution from energy. Fuel prices have declined, electricity and gas prices have stabilised, albeit at a higher level. The Dark Orange Bars on this chart show how the contribution from Energy Prices falling and turning negatively in the coming months. Giving off gems price cap on energy and gas bills, we expect inflation to take a further step down in the july dates will be published in two weeks time. That will come down to around 7 at that point. Following a larger step down in 0ctober s data to around about
Was weaker than we expected in the Fourth Quarter of last year but we think the First Quarter of this year has been a bit stronger, which will lead the level of Economic Activity broadly when we thought it would be. 12 months Consumer Price inflation fell from 4 in december to 3. 2 in march, its lowest rate since december 2021. March, its lowest rate since december2021. 0. I march, its lowest rate since december 2021. 0. 1 higher than we expected in february. The decline was spread across food, core goods and services. Energy prices have also continued to contribute negatively to the Headline Inflation rate. As a lower 0fgem cap on Household Energy prices come into effect in april, we expect Headline Inflation to drop further to a level very close to target in the next few months. But we then expected to edge up months. But we then expected to edge up a again. This absence of data surprises is an indication that we are now getting back to more normal times, at least compared to the hig
some of your final words there, you were some of your final words there, you were talking about having rates sufficiently high for sufficiently lon- sufficiently high for sufficiently long to sufficiently high for sufficiently long to bring inflation back to target long to bring inflation back to target. can you expand on that little target. can you expand on that little bit target. can you expand on that little bit because there are many households out there that are looking households out there that are looking at interest rates, they are hoping looking at interest rates, they are hoping that after they were high for a while hoping that after they were high for a while that they would start to come a while that they would start to come down, are you saying that actually come down, are you saying that actually we need to be prepared for interest actually we need to be prepared for interest rates to be high for longer than a interest rates to be high for longer t
illustrates that bank rates can secure return of inflation to the target. the market curve is higher than the current level bank rates in the coming quarters but then falls below it further out. averaging just under 5.5% over the next three years. a lot will depend on what happens in the labour market. there are signs that the labour market is loosening, the unemployment rate rest slightly at 4% in the three months and the ratio vacancies to the number of unemployed job seekers. that has continued to ease. as shown in chart six. the labour market remains strong. annual private section regular pay growth
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