Inflation is on track to hit 5% by the end of 2023, and may even do so this month, according to Rob Elder, agent for London at the Bank of England.
Speaking as the opening keynote at the Mortgage Business Expo (MBE) today (12th October) at the Business Design Centre in London, Elder noted that this fall was only possible due to the high rate of interest rates.
He said that lower interest rates would have meant inflation sticking at a higher level, and that while it was impossible to be sure that it would reach 2% next year, this was more likely due to the Bank of England’s efforts.
Elder said: “We think inflation is going to carry on falling, and get very close to our 2% target by the end of next year.
“It’s only happening because interest rates have been raised a lot, and that is hurting the economy, hurting the housing market, and hurting the demand for mortgages.
“That, unfortunately, is what’s been needed to bring inflation back under control.”
He added: “We are aware that this is causing pain, it’s just very hard to avoid.”
