UK Inflation To Overshoot BoE Target For Next Four Years, NIESR Forecasts
UK Inflation To Peak At 4.4% In February 2027, Return To BoE s 2% Target In Late 2030 - Peak Forecast Raised From 3.8%, With Inflation Returning To Target A Year Later Than Previously Forecast As The Iran War Feeds Through To Wages - Expects One BoE Hike In February, Against Two Or Three Quarter-Point Hikes Priced By End-2027. Estimates Rates Of Around 5% Would Be Needed To Bring Inflation To Target Over The Medium Term - Raises 2026 GDP Growth Forecast To 1.6% From 1.1% On Stronger Public Spending And Business Investment, Partly Driven By AI. Sees Growth Slowing To 1.1% In 2027 And 0.9% In 2028 - Sees Unemployment Rising From 4.8% In 2026 To A Peak Of 5.1% In 2031, With Wage Growth Averaging 3.9% Over The Next Three Years - Healey s October Budget Did Little To Strengthen Public Finances, With Tax And Spending Decisions Deferred And Borrowing Reduction Plans Lacking Credibility
Story updates
UK Inflation To Peak At 4.4% In February 2027, Return To BoE s 2% Target In Late 2030 - Peak Forecast Raised From 3.8%, With Inflation Returning To Target A Year Later Than Previously Forecast As The Iran War Feeds Through To Wages - Expects One BoE Hike In February, Against Two Or Three Quarter-Point Hikes Priced By End-2027. Estimates Rates Of Around 5% Would Be Needed To Bring Inflation To Target Over The Medium Term - Raises 2026 GDP Growth Forecast To 1.6% From 1.1% On Stronger Public Spending And Business Investment, Partly Driven By AI.
Sees Growth Slowing To 1.1% In 2027 And 0.9% In 2028 - Sees Unemployment Rising From 4.8% In 2026 To A Peak Of 5.1% In 2031, With Wage Growth Averaging 3.9% Over The Next Three Years - Healey s October Budget Did Little To Strengthen Public Finances, With Tax And Spending Decisions Deferred And Borrowing Reduction Plans Lacking Credibility