The Office for Budget Responsibility (OBR) has revised its inflation forecasts, indicating that inflation will remain above the Bank of England's target due to sustained pressures on household finances.
The OBR projects inflation to reach 2.6% in 2025, a rise from an earlier estimate of 2.2% for 2024, following a temporary dip to 1.7%.
Despite a recent cut in interest rates by the Bank of England, uncertainty about further cuts remains as the Bank grapples with wage growth declining to a four-year low.
Current money market expectations show an 84% chance of the Monetary Policy Committee cutting base rates to 4.75%, but this outlook has become increasingly uncertain.
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