British inflation cools more than expected in October
Official data released on Wednesday (November 15) revealed that annual consumer price inflation in the UK dropped to 4.6%, a significant decrease from September’s high of 6.7%. The decline can be attributed to a decrease in household energy prices and a slowing of price growth in the service sector. Additionally, this marks the smallest increase in consumer prices in two years.
Of particular interest were the key inflation measures closely monitored by the Bank of England, which saw a larger decrease than anticipated. Core inflation, which excludes energy and food prices, fell from 6.1% to 5.7%, while service sector inflation also experienced a decline.
The release of this data brought some relief to both the Bank of England and Prime Minister Rishi Sunak, who had pledged to reduce price growth by half this year. However, critics argue that the government had initially placed blame on external factors for the inflationary pressures, only to later attempt to take credit for the subsequent drop.
Despite the recent decline, the UK still maintains the highest rate of consumer price growth among the Group of Seven nations, slightly surpassing France.
One leading analyst at Barclays issued a warning, stating that the UK economy is currently facing stagflation. This combination of stagnant economic growth and rising inflation poses ongoing challenges for the country.
The data serves as a reminder that although the recent drop in inflation provides some respite, the road ahead remains challenging for the UK economy.
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