Inflation in the UK fell to 1.7 percent year-on-year in September, the National Statistics Office (ONS) said. For the first time in 3.5 years, the price growth rate was below the Bank of England (BoE) inflation target.
Such a big drop inflation is a surprise, because analysts predicted that it would only drop to 1.9%. In August, prices increased by 2.2%. year to year.
Inflation in the UK
The ONS explained that they contributed primarily to reducing the rate of inflation fuel priceswhich in September this year were 10.4 percent. lower than a year earlier, as well as airline ticket prices, while the rising prices of food and non-alcoholic beverages had the strongest effect in the opposite direction.
In October 2022, the annual inflation rate in the UK rose to 11.1%, the highest level in 41 years. This was the result of supply problems following the COVID-19 pandemic and growing energy prices as a result of the Russian attack on Ukraine.
Since then, inflation has gradually declined and in May and June this year it dropped to 2 percent, i.e. for the first time in almost three years it was at the level of the BoE's inflation target of 2 percent. In July and August it increased slightly – to 2.2%. Previously, inflation was below the Bank's target England in April 2021 – then it was 1.5%.
Wednesday's inflation data significantly increases the likelihood that the BoE's Monetary Policy Committee will cut prices again at its next meeting on November 7. interest rates. At the August meeting, the main interest rate was reduced from 5.25%. – it remained at this level for the previous 12 months – up to 5%. The bank then suggested further cuts if inflation remained under control.
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