Deutsche Bank analysts forecast a rise in UK headline inflation to 3.80% for October, driven by energy and tobacco costs, with expectations for persistent price pressures to push inflation toward 4.25% by early 2027.
Deutsche Bank forecasts UK headline CPI rising to 3.80% y-o-y in October from 3.48% in September, and pushing toward 4.25% early next year. Hotter-than-expected inflation supports a Bank of England keeping rates higher, which tends to lift sterling. This is a forecast, not the data itself, and the actual print could differ.
Deutsche Bank sees UK headline CPI jumping to 3.80% y-o-y in October from 3.48% and core rising to 2.87%, with prices staying sticky near 4.25% next year. Sustained inflation above target pushes rate expectations higher, which typically lifts gilt yields. Being a forecast, the realised CPI print could soften the effect.
Deutsche Bank economists Sanjay Raja and Maui Brennan project UK headline inflation will climb to 3.80% in October, up from 3.48% in September. The firm expects price pressures to remain sticky, with headline CPI potentially reaching 4.25% early next year due to energy costs, tobacco duties, and rising food and services prices.
The article notes inflation is set to rise from 3.48% to around 3.80% and toward 4.25% next year. Persistent inflation usually makes the central bank keep interest rates higher for longer, which tends to support the currency.
No, these are Deutsche Bank economists' forecasts for October inflation; the official figures may differ.
Sticky inflation, as the article projects (headline moving toward 4.25% next year), raises expectations that interest rates stay higher, which generally pushes benchmark bond yields up.