The rate of inflation in the UK has dropped to 2.3% in April, the lowest in nearly three years, according to official data from the Office for National Statistics (ONS). This significant decrease is attributed to cheaper gas and electricity bills, as well as falling food inflation.
Inflation is now at a level not seen since July 2021, signaling positive news for consumers. The drop from 3.2% in the previous year up to March indicates that prices are still rising, but at a slower pace. However, the current rate is higher than what economists and the Bank of England had forecast, with expectations set at 2.1%.
The closer alignment to the Bank of England’s 2% target may prompt rate-setters to consider lowering interest rates, making borrowing more affordable for individuals and businesses. The higher-than-expected inflation number could impact future rate cuts, as well as the key figure of core inflation, which excludes energy and food prices.
Factors contributing to the slowdown in price rises include a cut to Ofgem’s energy price cap, resulting in cheaper bills for consumers. Reduced food price inflation and the absence of higher tobacco levies have also played a role in driving down the inflation rate.
Political figures have weighed in on the news, with Chancellor Jeremy Hunt emphasizing the importance of fiscal responsibility and Prime Minister Rishi Sunak highlighting the positive impact of economic policies. However, TUC General Secretary Paul Nowak cautioned that the cost of living crisis is ongoing, with many individuals still facing financial challenges despite the decrease in inflation.