UK Price Inflation Falls Drastically to 4.6%

UK Price Inflation Falls Drastically to 4.6%

UK inflation fell sharply in October to its lowest rate in two years, largely due to lower energy prices.

Inflation, which measures the rate at which consumer prices rise, dropped to 4.6% in the year to October, down from 6.7% the month before.

The figure means a government target to halve inflation by the end of the year has been met early.

But there is a limit to how much credit ministers can take for the fall as energy prices settle.

Economists have said the main reason inflation has fallen from its peak of 11.1% in October 2022 is due to a fall in the energy price cap, which limits what suppliers can charge consumers per unit of energy.

They also note the Bank of England’s decision to raise interest rates in a bid to cool demand in the UK economy and slow price rises.

Rates are currently at 5.25%, a 15-year high, which has pushed up mortgage costs but also meant higher savings rates.

Grant Fitzner, chief economist at the Office for National Statistics (ONS), said inflation fell as “last year’s steep rise in energy costs has been followed by a small reduction in the energy price cap this year”.

He also said: “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.“