British annual consumer price inflation (CPI) dropped to 4.6% in October, according to official data released on Wednesday. This figure came as a surprise, falling below the Bank of England’s predictions and the consensus reached in a Reuters poll of economists, which had forecasted a reading of 4.8%.
The decrease in consumer prices marks the smallest increase since October 2021. Additionally, annual core inflation fell from 6.1% to 5.7% during the same period.
For Prime Minister Rishi Sunak, this news provides some much-needed relief. Sunak had previously promised to halve price growth before the expected 2024 election. Recent opinion polls have indicated that his Conservative Party is likely to lose in the upcoming election. The drop in inflation could potentially boost the public’s perception of his management of the economy.
However, Bank of England Chief Economist Huw Pill expressed caution, stating that even with the drop in inflation to just under 5%, it still remains “much too high.” While the decrease in price growth over the past year is significant, Pill believes that further measures need to be taken to bring inflation to a more desirable level.
Despite the positive development, the Bank of England has made it clear that they have no plans to cut interest rates from their current 15-year high. This decision comes as the UK’s economy continues to stagnate, hovering dangerously close to a recession.
As the economy faces ongoing challenges, it remains crucial for policymakers to carefully navigate the delicate balance between managing inflation and stimulating growth. The latest inflation data offers some respite, but much work still lies ahead to stabilize the UK’s economy and mitigate the impact of rising prices on the public.
More detail via Daily Mail Online here… ( Image via Daily Mail Online )