Outlook for inflation still murky according to savings specialist Kevin Brown
“UK inflation landed largely as expected, rising from 2.3% to 2.6%. A rate cut from the Monetary Policy Committee this week was already unlikely, but if inflationary pressures persist it may stall rate cuts in the New Year as well, in a further disappointment to mortgage holders.
“The inflation data comes at a time when the UK economy appears to be flagging, with GDP figures for October showing a contraction of 0.1%. This raises the spectre of a stagflationary environment, with low growth, high unemployment and rising prices. This would be a major challenge for policymakers in 2025.
“The outlook for inflation from here is still murky. The employers’ National Insurance rise comes into effect in April 2025 and may start to have an impact on the figures in the New Year. Companies have already said it will hurt hiring plans and wage increases, which would exert downward pressure on inflation. On the other hand, it may also encourage employers to raise prices to compensate for additional wage costs.
“Households will need to find a way to navigate this uncomfortable environment. A buffer of savings can provide some protection against slower wage growth and rising costs. Finding the best option to help your savings keep pace with inflation is key.”
-ENDS-
Contacts details:
Hilary Morrison
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Scottish Friendly is a leading UK mutual life and investments organisation. It provides investors and their families with a wide range of investment and protection solutions and provides life and investment products and services to other financial organisations.
Scottish Friendly has roots stretching back to 1862. Established as the City of Glasgow Friendly Society, its name changed in October 1992 when it took over Scottish Friendly Assurance.
The Group continues to flourish through a three-part growth strategy of organic growth, mergers and acquisitions, and business process outsourcing.
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Scottish Friendly Assurance Society Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority.