Inflation in UK falls to 7.9%, lowest level in a year
Inflation in UK has dropped to its lowest level in almost a year as price rises delayed by more than anticipated.
The rate slipped sharply to 7.9% in June, down from 8.7% the last month, although it stays nearly four times higher than the official mark.
Inflation in UK at the lowest level:
Sinking fuel prices contributed to the fall, while food prices increased less quickly than in June last year. UK inflation is now at its most downward annual rate since March 2022, with the drop described as “substantial”.
“It is a large drop, but let’s forget that last month we saw no change at all in headline inflation, so in some ways, what we are seeing this morning is catching up with the falls we’ve seen in other similar countries,” Grant Fitzner, head economist at the Office for National Statistics (ONS), which issues the figures, told the BBC’s Radio 4’s Today Programme.
“It still looks like we may have the highest rate of inflation in the G7 [group of developed nations], so still some way to go.”
Currently, the US inflation rate stands at 3%, whereas in the eurozone, it is at 5.5%. Food, energy and services costs have hit up since last year, squeezing families.
In response, the Bank of England has increased interest rates 13 times since December 2021 to reduce inflation, which is the rate at which prices increase over time.
It expects that consumers will spend less by making borrowing more costly, and price climbs will cool. However, inflation has stayed stubbornly high, concerning policymakers.
Climbing interest rates have even driven mortgage borrowing prices to their highest level in 15 years, leaving millions of homeowners facing higher monthly rebates.
Most inflation estimates are running in the right direction, with inflation predicted to drop below 7% next month as reductions in household energy bills affect the numbers.
