UK inflation has been above the government target of 2% for the past 24 months, peaking at 11.1% in October 2022 and coming down to 7.9% in June 2023, with core inflation (excluding energy, food, alcohol and tobacco) and services inflation at 6.9% and 7.2% respectively, still close to a 30-year high.
According to the latest Bank of England Monetary Policy Report, UK inflation will not go back to 2% before late 2024 or early 2025. This record is the more surprising given that the bank rate has climbed from 0.1% in December 2021 to 5% in June 2023, representing the largest policy rate hike cycle since 1988.
