Economists have revised down their predictions for UK inflation, with Citigroup forecasting that consumer price growth could fall below the Bank of England’s 2% spring target by this autumn, the FT has reported.
The revised forecasts come on the back of the fall in European gas prices.
Benjamin Nabarro, chief UK economist at Citigroup said: “In light of recent news, in particular the further sell-off in European gas prices, we have republished our monthly inflation profiles.”
He expects headline UK inflation to slow to below 5% from July – something which one month ago had been expected to happen in October – before slowing to just below 2% from the autumn.
In response to the forecasts, UKHospitality chief executive Kate Nicholls told MCA: “It’s welcome news that inflation rates are expected to fall faster than initially predicted, and this will help give the nation’s economy a much-needed boost.
“It is, however, crucial to remember that costs will still continue to rise despite falling inflation, and the accumulated rises businesses have experienced over the last few months have already scarred the sector. Many businesses in the hospitality industry won’t survive until the autumn without support from the Chancellor in the upcoming Budget.
“Hospitality desperately needs intervention from the government, particularly in the energy market, as without this support, businesses will be unable to drive the economic growth they’re capable of.”
