Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Latest NewsInflationJob creation and lossesLabour marketPay & benefits

Inflation forecast to hit 13% in autumn says Bank of England

by Rob Moss 4 Aug 2022
by Rob Moss 4 Aug 2022 The Bank of England say it expects CPI inflation to reach 13% in Q4. Photo: NM Bear / Shutterstock
The Bank of England say it expects CPI inflation to reach 13% in Q4. Photo: NM Bear / Shutterstock

The Bank of England has changed its forecast for inflation and has now predicted the consumer prices index to climb over 13% before the end of the year, and for it to remain ‘very elevated’ throughout much of 2023.

As the Monetary Policy Committee (MPC) announced the largest interest rate hike in 27 years – from 1.25% to 1.75% – it also revised its projections for inflation and economic growth.

It said that inflationary pressures have intensified significantly since its last report in May, largely reflecting a near doubling in wholesale gas prices.

“As this feeds through to retail energy prices, it will exacerbate the fall in real incomes for UK households and further increase CPI inflation in the near term.

“CPI inflation is expected to rise more than forecast in the May report, from 9.4% in June to just over 13% in 2022 Q4, and to remain at very elevated levels throughout much of 2023, before falling to the 2% target two years ahead.”

Governor of the Bank of England, Andrew Bailey, said the risks around the Bank’s forecasts were “exceptionally large at present”. Independent forecasts made yesterday by two think tanks, the Resolution Foundation and the National Institute for Economic and Social Research (NIESR), put CPI inflation at 15% and 11% respectively for the autumn.

Inflation and pay

Inflation reaches 9.4%, but pay awards well behind

How should HR handle the highest inflation in decades?

The NIESR forecast the retail price index, the measure often used by trade unions in pay bargaining, at a whopping 17.7%, putting further pressure on employers to match pay increases with the cost of living.

NIESR deputy director Stephen Millard said that interest rates would have to rise “the 3% mark” to bring inflation down.

The MPC also projected that the UK would enter recession from the fourth quarter of this year and will continue into next year. “Real household post-tax income is projected to fall sharply in 2022 and 2023,” it said.

TUC head of economics Kate Bell said: “Working people need an approach to inflation that protects jobs and that helps pay keep up with prices.

“But a rate rise does nothing about the current causes of inflation – global energy, commodity and food prices. It will only add to our problems, making a recession very likely and putting lots of people’s jobs at risk.”

She added: “The government must do more to get pay rising, starting with decent pay rises for public servants, a higher minimum wage, and stronger rights for working people and their unions to bargain for fair pay.”

Ben Kiziltug, head of northern Europe at HR software provider Personio, said: “With the UK’s interest rate spiralling, rising costs are adding to pressures already felt by consumers and businesses alike. But while rocky waters could lie ahead, businesses must ensure their people strategy isn’t first in the firing line.

“The last few years have demonstrated the vital role employers play as a social safety net for their people, supporting employees’ physical, mental and financial well-being. In order to fulfil this role while weathering the storm, it’s crucial that businesses are not prompted to make short term cuts. Instead, employers must continue to invest in their people to keep employees motivated and engaged – helping them to retain talent and succeed beyond this crisis.”

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

Other forecasts from the MPC included a prediction that the unemployment rate would go above 4% in the middle of 2023, rising to 6.25% by 2025.

Compensation and benefits opportunities on Personnel Today


Browse more compensation and benefits jobs

Rob Moss

Rob Moss is a business journalist with more than 25 years' experience. He has been editor of Personnel Today since 2010. He joined the publication in 2006 as online editor of the award-winning website. Rob specialises in labour market economics, gender diversity and family-friendly working. He has hosted hundreds of webinar and podcasts. Before writing about HR and employment he ran news and feature desks on publications serving the global optical and eyewear market, the UK electrical industry, and energy markets in Asia and the Middle East.

previous post
Shell to pay workers a one-off 8% bonus
next post
Office could be sanctuary for workers fearing winter fuel bills

You may also like

Fewer workers would comply with a return-to-office mandate

21 May 2025

Pay awards in real terms could fall for...

21 May 2025

UK and EU agree to collaborate on ‘youth...

19 May 2025

Immigration white paper: which jobs will be affected?

19 May 2025

Public sector needs 92,000 more workers to remain...

19 May 2025

Burberry puts 1,700 jobs at risk in cost-cutting...

14 May 2025

ONS: Slower wage growth but rising unemployment

13 May 2025

Downturn in hiring activity eased in April

12 May 2025

CIPD links Employment Rights Bill with low business...

12 May 2025

UK-US deal saves ‘thousands’ of jobs in car...

9 May 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+