Bank of England braces for bump in the road in fight against inflation

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The Bank of England's efforts to tame inflation are set to hit a bump in the road this month with official figures expected to show prices rising more rapidly again in August.

Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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11 Sep 2023

The annual rate of consumer price inflation dipped in July to 6.8 per cent, from 7.9 per cent in June, but the rising cost of petrol and diesel is the main factor likely to increase it to 7.1 per cent in August, according to a BoE forecast. The August data will be published on September 20.

The expected jump in headline consumer price inflation will complicate moves by senior BoE officials to give themselves the option of pausing interest rate rises when the central bank’s Monetary Policy Committee meets on September 21.

Andrew Bailey, BoE governor, last week cast doubt on the need to tighten monetary policy further to tackle inflation — by saying rates were now “much nearer” their peak than before.

There are many reasons why the August inflation data from the Office for National Statistics is likely to be relatively bad news, according to economists.

In August