UK inflation sticks at 6.7% as high prices persist; BoE sees slow fall to 2% target
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UK inflation remains very high at 6.7% in September, higher than other major economies, and falling only slowly. The BoE expects it to return to the 2% target only in 2025.
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Fast pay growth has eased slightly but signs of cooling in the job market are limited so far. Measuring the labour market has been harder recently.
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The housing market has slowed sharply due to higher mortgage rates, with house prices down about 5% since September.
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Consumer spending dropped in Q3, the first fall since early 2021, adding to risk of recession.
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Financial markets don't expect the BoE to cut rates until mid-2024, later than the Fed and ECB, as it focuses on reducing inflation.