Although we still think that the UK’s inflation problem will dissipate slowly rather than suddenly and the situation in the Middle East poses an upside risk to our inflation forecasts, leading indicators suggest that services CPI inflation and wage growth will soon slow more significantly. Meanwhile, the rise in our long-term interest rate forecasts, or R, means that whoever wins the next election will face a more daunting fiscal outlook.
We'll be discussing the implications of the end of the ultra-low interest rates era and the rise in R* in an online Drop-In at 12:30 GMT on Tuesday 31st October. (Register here.)
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