Surprise Drop in UK Inflation RateAug 28, 2017
The UK inflation rate has fallen to 2.2% in October according to latest figures from the Office for National Statistics (ONS).
The inflation rate as measured by the Consumer Price Index (CPI) fell to 2.2% in October compared with 2.7% the month before. The fall will come as welcome news to households up and down the country as inflation fell below the forecast rate of 2.5% and has now reached its lowest rate since September 2012.
Transport prices fell by 1.5% between September and October, the biggest fall since July 2009, as supermarkets slashed petrol prices earlier in the year. Both food and education inflation also fell contributing towards the lower rate of inflation which has now edged closer to the Bank of England’s target of 2%.
While the fall in rates comes as good news to UK consumers, the figures are yet to account for the steep rise in energy prices announced by SSE, British Gas and N Power over recent weeks.
Yesterday, EDF energy was the latest of the ‘Big Six’ energy firms to increase its prices. While their price hike appears modest at an average increase of 3.9%, it will still have a significant effect on households and individuals all over the country.
Which? executive director, Richard Lloyd said:
“While any increase is bad news for hard-pressed consumers, today’s announcement will make people question why other major suppliers have hit their customers so much harder.
“With trust at rock bottom and record numbers very worried about rising energy costs we’re calling on the chancellor to stand up for consumers when he stands up in the House of Commons to deliver this year’s Autumn Statement”
Echoing the statement from Richard Lloyd, energy prices are of course a worry for consumers up and down the UK and it’s important to remember that these price rises are yet to be considered in the latest figures from the ONS.
However, while many expect the significant price increases in energy to counteract the fall in inflation, we can only hope that the drop will remain to translate into consumer confidence and relief for UK consumers and businesses.