Inflation slows to 4.6% as government pledge met
By David Wood | 15th November 2023
UK inflation fell sharply in October to its lowest rate in two years, largely due to lower energy prices.
Inflation, which measures the rate at which consumer prices rise, dropped to 4.6% in the year to October, down from 6.7% the month before.
The figure means a government pledge to halve inflation by the end of the year has been met early.
But the BBC says there is a limit to how much credit ministers can take for the fall as energy prices settle.
Economists have said the main reason inflation has fallen from its peak of 11.1% in October 2022 is due to a fall this month in the energy price cap, which limits what suppliers can charge consumers per unit of energy.
They also note the Bank of England's decision to raise interest rates, in a bid to cool demand in the UK economy and slow price rises.
Rates are currently at 5.25%, a 15-year high, which has pushed up mortgage costs but also meant higher savings rates.
Although the signs point to the cost of living easing, many households will not feel better off, especially when it comes to energy bills.
Despite gas and electricity prices being lower than last year, most households will actually pay more for energy this winter than last because government support for bills is no longer in place.
Falling inflation also does not mean that most goods and services are cheaper to buy, rather that prices are rising less quickly.
Responding to the latest figures, Prime Minister Rishi Sunak said the pledge to halve inflation had been his "top priority" and required "hard decisions and fiscal discipline".
Chancellor Jeremy Hunt added that the government had played an important role by being "disciplined on spending, helping people into work and resisting calls for additional borrowing".
But Labour's shadow chancellor Rachel Reeves said that while lower inflation would grant "some relief for families", now was not the time for Conservative ministers to be "popping champagne corks and patting themselves on the back".
Despite October's fall, the UK is still some way off meeting the Bank of England's 2% inflation target and the Bank's policymakers have pointed out in recent weeks that interest rates are unlikely to be cut in the near future.
Gary Smith, GMB general secretary, said: "Today's figures will be cold comfort to people who are struggling to make ends meet. Prices are still surging and the cost of food is a third higher than it was two years ago."
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