IoD press release Inflation ticks up slightly, in line with expectations
Commenting on today’s data from the Office for National Statistics, that showed the annual rate of CPI inflation rising to 2.2% in July 2024, from 2.0% in June 2024, Anna Leach, Chief Economist at the Institute of Directors, said:
“Today’s rise in inflation is in line with expectations and so doesn’t change the outlook for interest rates. Inflation is expected to remain a bit above target over the coming months, as energy prices are no longer falling on the year, and services price inflation remains elevated, so we may only see one more small rate cut at best this year. But inflation should moderate further out, supporting further cuts in interest rates. The latest labour market data was promising on that front, showing private sector regular wage growth dropping below 5% for the first time in more than two years and vacancies down again.
“Looking to the Autumn, all eyes are on the government to make good on its positive messaging on stability and growth. To fundamentally drive up growth without stimulating inflation, we need much higher investment alongside greater participation in the labour market. We look forward to working with the government to ensure that moves to improve the quality of work, preserve and enhance the UK’s standing as a nation with a high quality, flexible labour market.”
