UK inflation fell more than expected in October, easing a cost-of-living crisis and relieving pressure on Prime Minister Rishi Sunak. The Consumer Prices Index hit a two-year low at 4.6 percent, dipping under Sunak’s five-percent target. CPI inflation slowed more than forecast and reached 6.7 percent in September. Sunak stated that official figures confirm they have halved inflation, but acknowledged that many people are still struggling.
The annual inflation rate peaked at 11.1 percent in October 2022 due to escalating energy prices after Russia’s invasion of Ukraine. The recent fall in energy costs contributed to the substantial decline in inflation last month. Analysts suggest that the sharp drop in the inflation rate may lead to tax cuts in the upcoming budget announcement by finance minister Jeremy Hunt. The decrease in UK inflation can be largely attributed to interest-rate hikes by the independent Bank of England and cooler energy prices worldwide. While major central banks have successfully reduced inflation in their respective economies, global inflation remains high. Economists warn that persistently high inflation could result in prolonged high interest rates and potential economic recession. On a positive note, official data indicates that wages have grown above CPI inflation, indicating some relief for individuals amidst the cost-of-living squeeze.
UK inflation fell more than expected in October, reaching a two-year low at 4.6 percent and relieving pressure on Prime Minister Rishi Sunak. The drop in inflation is attributed to easing energy costs and could potentially lead to tax cuts in the upcoming budget announcement. The decrease in inflation is largely thanks to interest-rate hikes and cooler energy prices worldwide.
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