BoE MPR Forecasts: CPI peak raised to 4.9% in Q2 2027 (prev. 3.1%), back below target by end of horizon; GDP raised for 2026/27, cut for 2028

(Priors from the July MPR; peaks and troughs in bold on new figures)

• Q4 2026: 3.8% (prev. 3.2%)
• Q4 2027: 4.0% (prev. 2.1%)
• Q4 2028: 2.0% (prev. 1.9%)
• Q4 2029: 1.8% (prev. 1.9% in Q3 2029); trough, end of horizon
• Peak: 4.9% in Q2 2027 (prev. 3.1% for Q2 2027; July peaked at 3.2% in Q4 2026/Q1 2027)
• Q1 2027 4.4% (prev. 3.2%)
• Q1 2028 3.1% (prev. 1.7%)
• Q1 2029 1.9% (prev. 1.9%)

Core and services CPI Y/Y (monthly staff forecasts only; no quarterly path is published)

• Core: Oct 2.9% (prev. 2.9%), Nov 2.9% (prev. 2.9%; trough, 2.86%), Dec 3.0% (prev. 2.8%), Jan 2.9%, Feb 3.0%, Mar 3.2% (peak)
• Services: Oct 3.9% (prev. 3.8%), Nov 3.8% (prev. 3.7%), Dec 3.9% (prev. 3.6%; peak, 3.94%), Jan 3.7% (trough, 3.65%), Feb 3.7%, Mar 3.7%

• Oct 3.7% (prev. 3.2%; trough), Nov 3.8% (prev. 3.2%), Dec 3.8% (prev. 3.1%), Jan 4.3%, Feb 4.5% (peak), Mar 4.4%

• Q4 2026: 2.2% (prev. 1.2%); peak
• 2026 1.6% (prev. 1.1%)
• Q4 2027: 1.0% (prev. 1.4%); trough, also 1.0% in Q1 2028 (prev. 1.6%)
• 2027 1.3% (prev. 1.1%)
• 2028 1.2% (prev. 1.7%)
• Q4 2028: 1.4% (prev. 1.7%)
• Q4 2029: 1.6% (prev. 1.6% in Q3 2029)
• Q1 2027: 1.8% (prev. 0.8%)

• 2026 4.8% (prev. 5.0%)
• 2027 4.9% (prev. 5.3%)
• 2028 5.1% (prev. 5.2%)

Market-implied Bank Rate path (conditioning assumption)

• Q4 2026: 3.9% (prev. 3.9%); trough
• Q4 2027: 4.9% (prev. 4.2%); peak, held from Q4 2027 to Q4 2028
• Q4 2028: 4.9% (prev. 4.1%)
• Q4 2029: 4.7% (prev. 4.2%)
• Q1 2027: 4.2% (prev. 4.1%)

• Direct energy contribution to CPI:
• Q4 2026: 1.1pp (prev. 0.4pp)
• Q4 2027: 0.3pp (prev. -0.1pp)
• Q4 2028: -0.5pp (prev. -0.2pp)
• Q4 2029: -0.1pp (prev. 0.1pp in Q3 2029)
• Peak: 1.4pp in Q1 2027 (prev. 0.3pp)
• Trough: -0.6pp in Q3 2028 (prev. -0.2pp)
• Electricity & gas Y/Y: Oct 7.9% (prev. 2.9%; trough), Nov 8.7% (prev. 2.9%), Dec 9.6% (prev. 3.2%), Jan 24.0%, Feb 25.1% (peak), Mar 22.5%
• Fuels & lubricants Y/Y: Oct 33.3% (prev. 11.3%; peak), Nov 32.2% (prev. 9.3%), Dec 29.2% (prev. 6.9%), Jan 30.3%, Feb 29.7%, Mar 17.7% (trough)