The inflation rate is expected to remain around the Bank of England’s 2% target on 16 October, which raises the prospect of another base rate cut. 

CPI inflation stood at 2.2% in the 12 months to August 2024, unchanged from July.

As such, the markets expect two 0.25% rate cuts by the end of 2024.

Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “It’s a push-me-pull-you month for inflation, which is likely to keep the Bank of England on track for a rate cut in November.

“Grocery inflation is likely to have risen in September, thanks to poor harvests hiking prices of things like chocolate and olive oil.

“However, shop prices more broadly may have fallen, and petrol prices have also been dropping, which could leave inflation around the Bank of England’s target.”

She added: “This may be the last of the good news on inflation for a while, because October’s figures could look more grizzly.

“Petrol prices are likely to climb as a result of conflict in the Middle East, which has pushed the oil price higher. Even more strikingly, energy prices rose at the start of the month, after falling a year earlier, which will push inflation up.

“However, the Bank of England is unlikely to be too concerned about this particular bump in the road. It’s less worried about price rises caused by external factors than it is about those feeding into wages and getting embedded.

“Assuming nothing alarming from the wage data, we’re likely to see it cut rates in November and possibly December.”

Via @PropertyWire