UK inflation has fallen by lower than expected to 2.3 per cent, dashing hopes that the Bank of England will lower interest rates at its next meeting in June.
The figures released by the Office for National Statistics (ONS) on Wednesday morning showed inflation was 2.3 per cent in April, which is higher than the 2.1 per cent level predicted by economists.
It marks the lowest level since July 2021, however it is still 0.3 percentage points higher than the Bank’s target figure of 2 per cent.
Prime minister Rishi Sunak declared the figures a “major moment for the economy”.
He said: “This is proof that the plan is working and that the difficult decisions we have taken are paying off. Brighter days are ahead, but only if we stick to the plan to improve economic security and opportunity for everyone.”
Reacting to the figures shadow chancellorRachel Reeves said: “Inflation has fallen, but now is not the time for Conservative ministers to be popping champagne corks and taking a victory lap.“After fourteen years of Conservative chaos families are worse off. Prices in the shops have soared, mortgage bills have risen and taxes are at a seventy year high.
“Rishi Sunak is now putting family finances at risk again with his £46 billion unfunded policy to abolish national insurance that will mean higher borrowing, higher taxes or the end of the state pension as we know it.“It’s time for change.
“Labour’s first steps will deliver economic stability so we can grow our economy and keep taxes, inflation and mortgages as low as possible.”
The surge in inflation, which reached 11.1 per cent in October 2022, has been influenced by factors including the emergence of global economies from the Covid-19 pandemic and then the energy price shock caused by the war in Ukraine.
Grant Fitzner, the ONS’s chief economist, said: “There was another large fall in annual inflation led by lower electricity and gas prices, due to the reduction in the Ofgem energy price cap.
“Tobacco prices also helped pull down the rate, with no duty changes announced in the budget.
“Meanwhile, food price inflation saw further falls over the year. These falls were partially offset by a small uptick in petrol prices.”
More follows…
