BoE MPR Forecasts: CPI peak raised to 4.9% in Q2 2027 (prev. 3.1%), back below target by end of horizon; GDP raised for 2026/27, cut for 2028
ORIGINAL · NewsquawkBoE MPR Forecasts: CPI peak raised to 4.9% in Q2 2027 (prev. 3.1%), back below target by end of horizon; GDP raised for 2026/27, cut for 2028Read originalHide original
(Priors from the July MPR; peaks and troughs in bold on new figures) CPI Q4 2026: 3.8% (prev. 3.2%) Q4 2027: 4.0% (prev. 2.1%) Q4 2028: 2.0% (prev. 1.9%) Q4 2029: 1.8% (prev. 1.9% in Q3 2029); trough, end of horizon Peak: 4.9% in Q2 2027 (prev. 3.1% for Q2 2027; July peaked at 3.2% in Q4 2026/Q1 2027) Q1 2027 4.4% (prev. 3.2%) Q1 2028 3.1% (prev. 1.7%) Q1 2029 1.9% (prev. 1.9%) Core and services CPI Y/Y (monthly staff forecasts only; no quarterly path is published) Core: Oct 2.9% (prev. 2.9%), Nov 2.9% (prev. 2.9%; trough, 2.86%), Dec 3.0% (prev. 2.8%), Jan 2.9%, Feb 3.0%, Mar 3.2% (peak) Services: Oct 3.9% (prev. 3.8%), Nov 3.8% (prev. 3.7%), Dec 3.9% (prev. 3.6%; peak, 3.94%), Jan 3.7% (trough, 3.65%), Feb 3.7%, Mar 3.7% Monthly headline CPI Y/Y Oct 3.7% (prev. 3.2%; trough), Nov 3.8% (prev. 3.2%), Dec 3.8% (prev. 3.1%), Jan 4.3%, Feb 4.5% (peak), Mar 4.4% GDP growth forecast Q4 2026: 2.2% (prev. 1.2%); peak 2026 1.6% (prev. 1.1%) Q4 2027: 1.0% (prev. 1.4%); trough, also 1.0% in Q1 2028 (prev. 1.6%) 2027 1.3% (prev. 1.1%) 2028 1.2% (prev. 1.7%) Q4 2028: 1.4% (prev. 1.7%) Q4 2029: 1.6% (prev. 1.6% in Q3 2029) Q1 2027: 1.8% (prev. 0.8%) Unemployment Rate 2026 4.8% (prev. 5.0%) 2027 4.9% (prev. 5.3%) 2028 5.1% (prev. 5.2%) Market-implied Bank Rate path (conditioning assumption) Q4 2026: 3.9% (prev. 3.9%); trough Q4 2027: 4.9% (prev. 4.2%); peak, held from Q4 2027 to Q4 2028 Q4 2028: 4.9% (prev. 4.1%) Q4 2029: 4.7% (prev. 4.2%) Q1 2027: 4.2% (prev. 4.1%) Energy Direct energy contribution to CPI: Q4 2026: 1.1pp (prev. 0.4pp) Q4 2027: 0.3pp (prev. -0.1pp) Q4 2028: -0.5pp (prev. -0.2pp) Q4 2029: -0.1pp (prev. 0.1pp in Q3 2029) Peak: 1.4pp in Q1 2027 (prev. 0.3pp) Trough: -0.6pp in Q3 2028 (prev. -0.2pp) Electricity & gas Y/Y: Oct 7.9% (prev. 2.9%; trough), Nov 8.7% (prev. 2.9%), Dec 9.6% (prev. 3.2%), Jan 24.0%, Feb 25.1% (peak), Mar 22.5% Fuels & lubricants Y/Y: Oct 33.3% (prev. 11.3%; peak), Nov 32.2% (prev. 9.3%), Dec 29.2% (prev. 6.9%), Jan 30.3%, Feb 29.7%, Mar 17.7% (trough)
The forecast raises the near-term inflation peak, projects lower inflation by the horizon’s end, increases 2026–27 GDP forecasts, and lowers the 2028 forecast.
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(Priors from the July MPR; peaks and troughs in bold on new figures) CPI Q4 2026: 3.8% (prev. 3.2%) Q4 2027: 4.0% (prev. 2.1%) Q4 2028: 2.0% (prev. 1.9%) Q4 2029: 1.8% (prev. 1.9% in Q3 2029); trough, end of horizon Peak: 4.9% in Q2 2027 (prev. 3.1% for Q2 2027; July peaked at 3.2% in Q4 2026/Q1 2027) Q1 2027 4.4% (prev. 3.2%) Q1 2028 3.1% (prev. 1.7%) Q1 2029 1.9% (prev. 1.9%) Core and services CPI Y/Y (monthly staff forecasts only; no quarterly path is published) Core: Oct 2.9% (prev. 2.9%), Nov 2.9% (prev. 2.9%; trough, 2.86%), Dec 3.0% (prev. 2.8%), Jan 2.9%, Feb 3.0%, Mar 3.2% (peak) Services: Oct 3.9% (prev. 3.8%), Nov 3.8% (prev. 3.7%), Dec 3.9% (prev. 3.6%; peak, 3.94%), Jan 3.7% (trough, 3.65%), Feb 3.7%, Mar 3.7% Monthly headline CPI Y/Y Oct 3.7% (prev. 3.2%; trough), Nov 3.8% (prev. 3.2%), Dec 3.8% (prev. 3.1%), Jan 4.3%, Feb 4.5% (peak), Mar 4.4% GDP growth forecast Q4 2026: 2.2% (prev. 1.2%); peak 2026 1.6% (prev. 1.1%) Q4 2027: 1.0% (prev. 1.4%); trough, also 1.0% in Q1 2028 (prev. 1.6%) 2027 1.3% (prev. 1.1%) 2028 1.2% (prev. 1.7%) Q4 2028: 1.4% (prev. 1.7%) Q4 2029: 1.6% (prev. 1.6% in Q3 2029) Q1 2027: 1.8% (prev. 0.8%) Unemployment Rate 2026 4.8% (prev. 5.0%) 2027 4.9% (prev. 5.3%) 2028 5.1% (prev. 5.2%) Market-implied Bank Rate path (conditioning assumption) Q4 2026: 3.9% (prev. 3.9%); trough Q4 2027: 4.9% (prev. 4.2%); peak, held from Q4 2027 to Q4 2028 Q4 2028: 4.9% (prev. 4.1%) Q4 2029: 4.7% (prev. 4.2%) Q1 2027: 4.2% (prev. 4.1%) Energy Direct energy contribution to CPI: Q4 2026: 1.1pp (prev. 0.4pp) Q4 2027: 0.3pp (prev. -0.1pp) Q4 2028: -0.5pp (prev. -0.2pp) Q4 2029: -0.1pp (prev. 0.1pp in Q3 2029) Peak: 1.4pp in Q1 2027 (prev. 0.3pp) Trough: -0.6pp in Q3 2028 (prev. -0.2pp) Electricity & gas Y/Y: Oct 7.9% (prev. 2.9%; trough), Nov 8.7% (prev. 2.9%), Dec 9.6% (prev. 3.2%), Jan 24.0%, Feb 25.1% (peak), Mar 22.5% Fuels & lubricants Y/Y: Oct 33.3% (prev. 11.3%; peak), Nov 32.2% (prev. 9.3%), Dec 29.2% (prev. 6.9%), Jan 30.3%, Feb 29.7%, Mar 17.7% (trough)
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