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Higher fuel duty wouldn’t reignite inflation

In a week when the Prime Minister said that the coming Budget will be “painful”, we think there’s a growing chance that fuel duty will rise from next year for the first time since 2011. That will prevent petrol prices from falling even if oil prices decline as we expect. And while it raises our CPI inflation forecast for 2025 and 2026, the changes aren’t big enough to influence the path of Bank Rate.

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