CPI inflation remains at 4%

CPI inflation remains at 4%

14 Feb 2024

Danny Vassiliades, Partner at XPS Pensions Group, commented: “Today’s announcement that annual CPI inflation remained at 4.0% in the year to January 2024 shows that the route to lower inflation and lower interest rates remains uncertain. Consensus forecasts are also expecting tomorrow’s GDP estimates to show that the UK was in technical recession during the second half of 2023, having experienced two successive quarters of negative growth.

Whilst these announcements show that pension scheme trustees should continue to monitor sponsor covenants and scheme funding levels, there is reason to be hopeful that monetary policy will soon see inflation decrease.

Despite possible inflationary pressures from the current volatile geopolitical environment, expectations remain that CPI inflation will start falling towards the Bank of England’s 2% target later this year and that Bank base rate cuts are on the horizon.”