Andrew Bailey says inflation set to drop as Bank of England interest rate decision looms
The central bank boss said there will be a "noticeable drop" in inflation after the rate stalled in the latest figures.
Bank of England boss Andrew Bailey has said the rise in prices will continue to ease with inflation set to fall further.
Mr Bailey told The Belfast Telegraph there will soon be a "noticeable drop" in the figure in October, in comparison to sharp energy price increases from a year ago.
The central bank previously predicted it would fall to 4.9 percent by the end of the year although it remained at 6.7 percent for the year to September.
Commenting on the September figures, Mr Bailey said: "It was not far off what we were expecting. Core inflation fell slightly from what we were expecting and that's quite encouraging."
He said that wage inflation will need to drop by a large amount for overall inflation to come down towards the Bank's two percent target.
The latest figures from the ONS showed wages outpaced inflation for the first time in almost two years with 7.8 percent growth for the three months to August.
Mr Bailey said this week: "Pay growth as measured is still well above anything that's consistent with the (inflation) target.
"I understand, though, that people will want to see the evidence that inflation is coming down. I think we can see that evidence."
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Prime Minister Rishi Sunak said of the latest inflation figures: “We’ve made great progress but I know there is still a way to go.
“Tackling inflation remains my number one priority as Prime Minister. We will stick to our plan and get it done.”
The price of food and non-alcoholic drinks fell for the first time in two years, but this was offset by higher petrol and diesel prices for motorists and after rising supply chain costs for businesses.
Chancellor Jeremy Hunt also predicted prices will continue to fall over the coming months.
He said: "As we have seen across other G7 countries, inflation rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year.
“Today’s news just shows this is even more important so we can ease the pressure on families and businesses.”
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