The UK consumer price inflation rate fell to 3.6% in the year to October. That would be the first drop since March. Last month the Office for National Statistics (ONS) declared a historic decrease in inflation rates. This drop brings us to 3.6%, the same low rate that we hit in June, the lowest since then. This recent development represents one positive step toward providing some relief to households that are facing an increasing burden of cost—yet many obstacles lie ahead.
New Chancellor Rachel Reeves welcomed the fall in the rate of inflation. She understood that exorbitant prices still drain family budgets all over the nation. So while this is great news, Melanie made clear there’s still “more to do” to relieve the financial squeeze facing families.
What the latest numbers show is that even as the overall inflation rate has gone down, food price inflation is actually going up. Now, food prices have shot up by 4.9% since last October. While there is some good news in this trend, it reflects that inflationary pressures are not letting up across the board for all sectors. At the same time, a slowing in energy price rises has played its part in the overall dip in the UK inflation rate.
Yet with the inflation rate at 3.8% as of September, the financial pressures are starting to uncoil, though still tight compared to recent months. This drop does not erase the fact that inflation has exceeded the Bank of England’s target rate of 2% every month since Labour’s last budget announcement. A dramatic difference is apparent when compared to a year ago this month, when inflation reached a high mark of 11.1%.
Grant Fitzner, chief economist at the ONS, issued a reassuring statement explaining the recent inflation surge as follows. He cautioned that even as the pace of inflation slows – which is true – it doesn’t mean that anything is getting cheaper. Rather, it means that they are going up more slowly.
“If the rate of inflation falls, that doesn’t mean prices are falling; it means that prices are increasing at a slower rate.” – Grant Fitzner
“We’re seeing some attempt to rebuild some of those margins, but that’s quite gradual.” – Grant Fitzner
At the same time, opposition figures are raising the alarm over government policies that they argue are fueling inflationary pressures today and into the future. Shadow Treasury Minister Mel Stride condemned the government’s economic management, claiming it had “stoked” inflation with higher levels of borrowing and tax. Stride demanded immediate cuts to spending in order to soften the blow on families struggling with higher costs of living.
“Inflation has been above target every single month since Labour’s last Budget, leaving working people worse off,” – Mel Stride
Debates about how best to tackle inflation are sometimes heated. Consumers will be getting a short-term windfall from this recent drop. The focus will likely shift to how policymakers will respond to ongoing challenges, particularly as food prices remain elevated and energy costs continue to fluctuate.