Free Trial

MNI UK Inflation and Wage Insight: October 2023 Release

  • Inflation data for September came in a tenth above market expectations (across headline, core and services) but both headline and services CPI were below the Bank of England’s August MPR forecasts (coming in two tenths and one tenth lower respectively).
  • The inflation data follows yesterday’s partial labour market report (covering the 3-months to August) where headline average weekly earnings (AWE) fell from 8.5%3m/YoY to 8.1%3m/YoY (2 tenths lower than consensus expectations) while total regular pay was in line with consensus expectations at 7.8%3m/YoY (down a tenth from last month’s revised print).
  • Overall, we think that there is little in this data to alter the course for the MPC. The MNI Markets team expects that the five members who voted for rates on hold in September will continue to vote for rates to remain on hold at the November MPC meeting, and expect that they will probably be joined by new MPC member Sarah Breeden in her first meeting.
  • Furthermore, a number of MPC members have tried to steer the conversation away from short-term data releases to a more medium-term outlook. They have also cast some doubt over the official ONS labour data.
  • The market reaction seems to back this up too – SONIA futures continue to price in around a 20-30% probability of a November hike – a level that they have been tracking through the majority of October so far.
  • In terms of the terminal peak around 18.5bp is priced in by March at the time of writing. This is up from lows of around 13.5bp last week but the moves from the lows have generally been in line with those seen across global markets.

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.