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In the UK, the rate of inflation decreased to its lowest point in over two years in the previous month. This was due to a significant drop in petrol prices, according to official data.
The ONS reported that the inflation rate, measured by the Consumer Prices Index, dropped to 3.9% in November, a decrease from 4.6% in October. This is the lowest it has been since September 2021.
The majority of economists predicted a decrease in inflation to 4.3% in the previous month.
The Government aimed to reduce inflation by half in 2023, but the current rate remains significantly higher than the Bank of England’s target of 2%.
Mr Hunt stated that due to inflation being reduced by more than half, steps are being taken to alleviate inflationary pressures on the economy.
“With the addition of business tax reductions announced in the autumn statement, we are now once again on track towards achieving robust and resilient economic growth.”
However, numerous households are still facing difficulties due to the high costs. Therefore, we will continue to prioritize implementing actions that alleviate the burden of living expenses.
The recent significant decrease in inflation follows the sharp decrease observed in October. Inflation went from 6.7% in September to a lower level, allowing Prime Minister Rishi Sunak to claim an early success in his aim to reduce inflation by half by the end of the year.
However, the Bank of England has promptly cautioned that the task of achieving a 2% inflation rate is still incomplete and has dampened the increasing expectations for a potential decrease in interest rates.
The Office for National Statistics (ONS) verified that the Bank of England, which maintained interest rates at 5.25% last week, was not aware of the most recent inflation data before making their decision.
The chief economist at the ONS, Grant Fitzner, stated that inflation has decreased to its lowest annual rate in more than two years. However, prices are still significantly higher than they were prior to the invasion of Ukraine.
The main reason for the decline this month was the drop in fuel prices, following a previous increase during the same period last year.
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The increase in food prices had a dampening effect on inflation, as they experienced a slower growth compared to last year.
The prices of various household items and used cars have also decreased.
According to data from the ONS, the decrease in fuel prices contributed to a decline in the inflation rate. The average price of petrol decreased by 4.1p per litre from October to December, reaching 151p in the last month.
Motor fuel prices decreased by 10.6% in the period of one year ending in November 2023, which is a larger decline compared to the 7.6% decrease in the one year period ending in October.
The CPI was affected by a decrease in the rate of yearly inflation for food, which fell to 9.2% in the previous month, down from 10.1% in October. This is the lowest rate since May of last year.
The cost of food has decreased for the past eight months consecutively, after reaching a record-breaking high of 19.2% in March. This is a welcomed relief for households struggling with financial constraints.
According to Tobias Gruber, the creator of My Community Finance, the current moment is ideal for individuals to “broaden their savings portfolio.”
He stated that if your savings have remained in the same account for years without any growth, there is a strong chance that you could be losing out on potential higher profits.
The start of a new year is the perfect opportunity to review your finances and consider the potential for earning more with your money in other areas.
Source: independent.co.uk
