UK Inflation has fallen to its lowest level in two years, providing a major relief to consumers and prompting Prime Minister Rishi Sunak to declare victory on his pledge to halve inflation. In a way, the rate at which prices are rising in UK has slowed down considerably.
UK Inflation Wins battle as prices fall to two-year low
Key points:
- The annual rate of inflation fell to 4.6% in October from 6.7% in September.
- This is the biggest decline in inflation since 1992.
- The decline in inflation is due to a number of factors, including low energy prices and government cost-of-living support measures.
- A decline in inflation is expected to lower interest rates.
We’ve seen UK inflation hit its lowest level in two years as a huge rise in household energy bills last year outpaced the annual comparison, official figures from the Office for National Statistics showed.
Releasing the figures on Wednesday, the Office for National Statistics said consumer prices rose 4.6% in October from a year earlier, a sharp rise from 6.7% in September and the slowest pace since 2021. The 2.1 percentage point decline between these two months was the sharpest decline since the 1992 decline. Positive news for UK consumers and businesses after UK inflation hits two-year low.
UK Inflation This decline was sharper than economists had predicted, reading 4.7% and this candidate will come in handy because the Bank of England has finished raising interest rates. After the release of this report, the pound continued to trade 0.2% weaker, slipping to $1.2469.
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The UK inflation figures falling to a two-year low will provide a huge boost to Sunak ahead of a widely expected general election next year, as he has made reducing UK inflation one of his top five promises in the 2023 election. Have made it.
UK Inflation, which reached 10.7% in the last quarter of 2022, looks set to be slightly more than double the Bank of England’s 2% target.
Meanwhile, Sunak said in a statement: “Official figures released this morning confirm that we have halved inflation, delivering on the first of five priorities we set out earlier this year.” “While it may be welcome news that prices are no longer rising as quickly as we know, many people continue to struggle and that is why we need to remain on track to get inflation back to 2%.” should remain.” SSI Recipients to Receive 3.25% Increase in Monthly Benefit Next Year
If we look at this month’s readings, inflation has fallen to 4.7% from 7.1%, the biggest decline since 1992 as price rises outpaced annual comparisons from a year ago. These price increases stem from then-Chancellor Norman Lamont’s 1991 budget.
A fall in inflation in UK would be welcomed by these families
The decline in inflation was largely driven by the impact of lower energy prices and the government’s cost-of-living support measures. However, there were also signs that underlying inflation is beginning to ease.
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Prices of goods and services other than energy rose 0.4% in October, down from 0.5% in September, the ONS said. The core inflation rate, which excludes food and energy, also fell to 0.3% from 0.4%.
The decline in inflation will be welcomed by families who are struggling with the rising cost of living. Real wages, which are wages adjusted for inflation, have been falling in recent months and many families are finding it difficult to make ends meet.
What does this mean?
- Compared to a year ago, it has become cheaper to buy goods and services in the UK.
- This is going to be a positive development for consumers, who will have more money to spend.
- This could be good news for businesses, as they will be able to charge less for their products and services.
Why is this happening?
- There are several factors contributing to the decline in inflation, including low energy prices and government support measures.
- The Bank of England is also expected to reduce interest rates, which is expected to keep prices down.