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Inflation tumbles to two-year low of 4.6% as energy costs ease | Business News

There has been a sharp decline in the rate of inflation to 4.6%, driven by a big easing in energy costs.

The Office for National Statistics (ONS) said the annual rate slowed last month, from the 6.7% figure reported in September, mainly due to the lower energy price cap imposed on households at the start of October.

The same month a year ago saw an unprecedented leap in pre-winter energy bills due to the fallout from Russia’s invasion of Ukraine, sparking the worst of the cost of living crisis.

The war was also responsible for rising food bills, which the official figures showed to be slowing further in October – easing to their lowest level since June last year at 10.1%.

“The easing in the annual inflation rates principally reflected negative contributions from three divisions, with large downward effects from housing and household services, food and non-alcoholic beverages, and restaurants and hotels,” the ONS said.

“Recreation and culture provided the only large positive contribution.”

The lower consumer prices index (CPI) inflation figure – which came in below economists’ expectations of 4.8% – is still high but a welcome development for household spending power.

Analysis: Inflation panic seems to be over but cost of living remains

That is because earnings growth has been outstripping inflation since the end of the summer.

The ONS reported earlier this week that the pace of wage growth was running at 7.7%.

It may also produce a sigh of relief in Downing Street as the weaker pace of price increases also means the prime minister’s pledge to halve the rate of inflation this year is currently being met.

Rishi Sunak said in response that work must continue to get inflation down to 2% – the Bank of England’s target rate.

“Inflation works like a tax. It eats into the pound in your pocket, affecting the price of your food shop, your mortgage, the size of your pension pot.

“This is why halving inflation has been my number one priority. Getting it down…

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This notice was published: 2023-11-15 05:25:00

By Sky News

Sky News is a British 24-hour information television channel, the first in Europe of its kind, launched on February 5, 1989 by the British Sky Broadcasting Company.

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