Each month, inflation numbers come out and seem to surprise everyone – except the chosen few who have access to the forecasts. So I thought we’d share with CoffeeHousers what is all too seldom put on public record: forecasts for inflation and base interest rates. It might be useful to anyone thinking of taking out a fixed rate mortgage deal. These forecasts are from Michael Saunders at CitiGroup, whom I regard as one of the best in the business. Pretty much every analyst thinks that interest rates will soon start a relentless march back to 5 per cent, so these 3 per cent fixed rate deals we’re getting right now will soon be a distant memory.
He envisages CPI hitting 5 per cent, more than double its target, but not quite getting back to target. And as Mervyn King knows only too well, events can get in the way – his original plan was that inflation would be back on target by now.
Britain’s best politics newsletters
You get two free articles each week when you sign up to The Spectator’s emails.
Already a subscriber? Log in
Comments
Join the debate for just £1 a month
Be part of the conversation with other Spectator readers by getting your first three months for £3.
UNLOCK ACCESS Just £1 a monthAlready a subscriber? Log in