The Bank of England said they are expecting the cost of living to fall (Picture: SolStock)
The cost of living crisis should start to ease within weeks, the Governor of the Bank of England said last night.
Andrew Bailey told the London School of Economics there was ‘more resilient activity’ in the economy and jobs market, meaning inflation should begin to fall.
He said: ‘We expect to see a sharp fall in inflation during the course of this year, starting probably in a couple of months or so from now.’
It comes after inflation rose to 10.4% last week, showing the path to lower costs will ‘not be entirely smooth’, Mr Bailey admitted.
But he said he was feeling ‘a bit more optimistic’ and expected inflation to fall sharply in the summer.
The Bank has helped keep some prices under control by hiking interest rates to 4.25% – the highest since October 2008.
Other economic forecasters said they expected interest rates to fall below 3% next year.
S&P Global predicted the Bank’s latest interest rate hike could be one of the last for now, as they expect rates will come down to 2.% by 2025.
Governor of the Bank of England Andrew Bailey has given Brits a glimmer of hope (Picture: AFP)
But the Bank remains concerned over the number of ‘economically inactive people’ as more and more opt for early retirement.
Mr Bailey said this is part of the reason why the Bank has had to hike interest rates so much.
‘We should expect this to put upward pressure on inflation in a way that would call for a higher level of interest rates to dampen demand,’ he said.
Rishi Sunak committed yesterday to win the fight against inflation, calling it ‘the thing that’s making people feel poor’.
Households across the UK have been struggling to cover the rising cost of food and bills (Picture: Getty)
The prime minister also promised consumers would ‘feel a lot better by the end of the year’.
<He said: ‘We’ve got a plan – trust me, the plan will work. We have got to stick with it, it’s not easy, it’s never easy to weed inflation out of the system.
‘The plan we’ve got is the right one. Hopefully you will see that in your bank accounts, you will feel a lot better by the end of the year.’