Lower energy prices are one factor behind a significant fall in UK inflation, according to the latest monthly data.
The consumer prices index (CPI) measure of inflation dropped to 4.6% in the year to October 2023, from 6.7% the previous month, the Office for National Statistics (ONS) said. It’s the lowest rate of inflation since October 2021.
“Inflation fell substantially on the month as last year’s steep rise in energy costs has been followed by a small reduction in the energy price cap this year,” explained ONS chief economist Grant Fitzner.
“Food prices were little changed on the month, after rising this time last year, while hotel prices fell, both helping to push inflation to its lowest rate for two years.”
Although food inflation remains high, October saw the annual rate ease to the lowest level since June last year at 10.1%.
However, James Smith, research director at think tank the Resolution Foundation warned that the cost-of-living crisis is not yet over and persistently high inflation has left consumers facing much higher prices.
“Over the past two years, the cost of energy has surged by 49% while food prices have risen by 28% — far greater than the 14% in average earnings over this period,” he said.
Despite October’s decrease, inflation is still well above the Bank of England’s 2% target and interest rates — currently at 5.25%, a 15-year high — are unlikely to be cut in the near future.
