The dip in CPI inflation in September feels a bit like the lull before the storm as we expect inflation to jump to close to 4.0% in October and to between 4.5% and 5.0% by April next year. As such, the fall in September probably won’t deter the Bank of England from raising interest rates from 0.10% in the coming months, although we think the markets have gone too far by pricing in rates rising to 1.00% next year.
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