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Tuesday, July 16, 2024

Inflation in Great Britain is the lowest in almost three years

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Inflation in the UK fell to 2 percent in May, bringing it within the Bank of England's target for the first time in almost three years. This situation was caused by, among others, falling prices of food, entertainment and household products.

The ONS reported that the annual rate inflation in the UK it fell to 2.0% To in May lowest inflation level since July 2021. In April it was 2.3 percent. As the office explained, the decline in inflation was mainly due to falling prices of food, entertainment, furniture and household products, while the driving factor was rising fuel prices.

Low inflation and elections in Great Britain

After the ONS reported a drop in inflation to 2.3% four weeks ago. with 3.2 percent in March, Prime Minister Rishi Sunak announced that elections to the House of Commons will be held on July 4, and not, as was widely expected, in the fall, hoping that he will be able to make the economy the leading theme of the campaign. Suppressing inflation is the only one of the five priorities he announced at the beginning of last year that he has undoubtedly implemented. When he took office in October 2022, the annual inflation rate was 11.1%, the highest level in 41 years.

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Sunak recalled this, referring to ONS data. “When I became prime minister, inflation was 11 percent. But we took bold action. We stuck to a clear plan and that's why the economy recovered. So let's not risk all this progress by choosing the Labor Party,” he said in a video posted on social media.

Inflation data released on Wednesday and the Bank's decision expected on Thursday England regarding height interest rates these are the last important economic indicators before the elections. Falling inflation increases expectations that the BoE will soon start cutting interest rates. However, analysts agree that this will not happen on Thursday, but in August at the earliest, and perhaps in September. Since September last year, the main interest rate has been 5.25%, which is the highest level in 16 years.

Main photo source: PAP/EPA

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