Interest rate rises not necessary, despite disappointing inflation data
18 October 2023
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Commenting on September’s Consumer Price Index, which showed inflation remaining steady at 6.7 per cent, Julian Jessop, Economics Fellow at the free market think tank, the Institute of Economic Affairs, said:
“Despite the disappointing inflation data for September, the Bank of England should now be thinking about cutting interest rates, not raising them again.
“The bigger than expected fall back in August means that inflation is still lower than the Bank had been forecasting. Economic growth has been weaker too.
“A large drop is baked in for October. The reduction in the Ofgem cap on domestic energy bills will knock more than one percentage point off the headline rate this month.
“Above all, money and credit are now both shrinking, adding to the risks of recession and ensuring that inflation has a lot further to fall.”
ENDS
Notes to Editors
Contact: media@iea.org.uk / 07763 365520
Writing for The Spectator in September, Julian explained why the decline in the growth of the money supply should drag the rate of inflation down over time.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
“Despite the disappointing inflation data for September, the Bank of England should now be thinking about cutting interest rates, not raising them again.
“The bigger than expected fall back in August means that inflation is still lower than the Bank had been forecasting. Economic growth has been weaker too.
“A large drop is baked in for October. The reduction in the Ofgem cap on domestic energy bills will knock more than one percentage point off the headline rate this month.
“Above all, money and credit are now both shrinking, adding to the risks of recession and ensuring that inflation has a lot further to fall.”
ENDS
Notes to Editors
Contact: media@iea.org.uk / 07763 365520
Writing for The Spectator in September, Julian explained why the decline in the growth of the money supply should drag the rate of inflation down over time.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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