The rise in CPI inflation in January from 5.4% to a new 30-year high of 5.5%, the latest rise in oil prices and the new item weights mean that we now think CPI inflation will rise to a peak of 7.9% in April (up from our previous forecast of 7.6%). This will add more pressure on the Bank of England to raise interest rates rapidly. We think rates will rise from 0.50% now to 1.25% this year and to 2.00% next year. Visit our new UK Inside Inflation dashboard on our CE Interactive platform to track how inflation is evolving.
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