UK inflation has dropped to its lowest in almost three years, thanks to falling gas and electricity prices. Official figures show that prices rose by 2.3% in the year to April, down from 3.2% in March. Despite this drop, inflation is still above the Bank of England’s target of 2% and slightly higher than experts predicted.
The Bank of England hinted at possible interest rate cuts this summer, with rates currently at 5.25%, the highest in 16 years. Lower gas and electricity prices, due to a new price cap, were the main reasons for the inflation drop. Energy prices fell 27% in April compared to last year, with gas prices down 38%.
Food and tobacco prices also contributed to the inflation fall, although mobile phone bills and rents kept rising. While some food items like milk and butter became cheaper, others like olive oil and crisps went up in price due to poor harvests and high demand.
Prime Minister Rishi Sunak saw this as a positive sign for the economy, but Labour’s shadow chancellor Rachel Reeves warned against celebrating too soon. Although overall prices decreased slightly, service prices, such as for haircuts and train tickets, remained high.
Inflation had surged to 11% in October 2022, mainly due to soaring energy costs after Russia’s invasion of Ukraine. Businesses, like butcher Gary Wildman’s, have faced increased costs but tried to keep prices stable for customers.
The Bank of England expects inflation to soon fall close to its target level but wants more evidence before cutting rates. This suggests a possible rate cut in August or September if inflation continues to decline.
For energy savings, people are advised to lower boiler temperatures, manage draughts, and limit shower time.
(Credit :BBC News)
https://www.bbc.com/news/articles/c511m7jgyl3o