UK Inflation Forecast for 2024

In 2024, the UK inflation rate is expected to drop to 2.2%, a sharp decline from the 7.3% recorded in 2023 and 9.1% in 2022. Prior to the surge, inflation rates were notably lower, with the highest being 4.5% in 2011 and a low of 0% in 2015. The inflation spike began in late 2021, reaching a 41-year high of 11.1% in October 2022. However, inflation has since steadily fallen to 4% by January 2024.

Sectoral Impact of Inflation in 2024

Despite the broader decline in inflation, some sectors have seen continued price increases. Food inflation remained persistently high at 6.9% in January 2024, while alcohol and tobacco prices rose by a significant 12.4%. Core inflation, which excludes food and energy, stayed elevated at 5.1%, exacerbating the UK’s ongoing Cost of Living Crisis.

What to Expect from the Upcoming UK CPI Report

With the UK Consumer Price Index (CPI) report set to release on Wednesday, all eyes are on the data. Forecasts suggest that CPI may drop below the 2% mark, a critical threshold for the Monetary Policy Committee (MPC) to potentially consider a rate cut.