KPMG comments on today’s inflation figures

“Rising inflation increases pressure on the MPC to chart a way out” says Yael Selfin, Chief Economist at KPMG UK.

“Rising inflation increases pressure on the MPC to chart a way out” says Yael Selfin

“The pace of annual inflation accelerated as the 54% increase in energy bills was captured in the inflation data alongside rapid rises in food and fuel costs. Rising cost of goods and services, together with higher interest rates and National Insurance contributions, will increase the strain on households’ budgets.

“Further interest rate rises are now expected this year, as the MPC will be keen to show they can keep inflation expectations anchored down the line. The key risk facing policymakers is if today’s high pace of inflation becomes embedded in pay negotiations, which will put additional pressure on prices to rise.

“The combination of rising commodity prices with supply bottlenecks has pushed UK inflation to 9%. Inflation is now expected to stay close to current high levels until at least the fourth quarter of this year as the impact of price rises already in train feeds through to consumer prices.”

 

ENDS

 

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Notes to Editors:  

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.