UK Inflation Stays High but May Peak Soon as Core Prices Ease; BoE Expected to Hold Rates

UK inflation remained high at 6.7% in September, with food prices still rising sharply despite falling global commodity prices.

However, core inflation and producer input prices are falling, suggesting inflation may soon peak.

With weak GDP growth, the Bank of England should hold interest rates at 5.25% at its next meeting.

The government borrowed less than expected in September, so the Chancellor should not raise taxes in his Autumn Statement.

The major risk is the Israel-Hamas conflict expanding, which could threaten oil shipments through the Straits of Hormuz and send energy prices spiking.