The Bank of England expects inflation to slow to 5% by the end of 2023

The Bank of England predicts a slowdown in consumer price growth in the UK by the end of 2023 to about 5%, according to the regulator's communique.

This will be facilitated by a slowdown in the growth of energy and food prices. However, as the Central Bank noted, service price inflation will remain high and close to the current level in the near future. It is expected that inflation will return to the target level of 2% only by the second quarter of 2025.

In June, inflation in the UK dropped to 7.9% in annual terms (from 8.7% in May), which was the lowest value since March 2022, as the ONS previously reported.

The Bank of England also forecasts the growth of British GDP in the second quarter by 0.1%, in the third quarter – by 0.4%.

At today's meeting on August 3, the British Central Bank raised the base interest rate by 25 basis points to 5.25% per annum. The decision coincided with the average forecast of analysts and economists. This was the 14th consecutive rate increase. The regulator's message says that monetary policy will remain at a fairly restrictive level for a fairly long period.