UK inflation hits target for first time in nearly three years

just now

ByTom Espiner, BBC Business Correspondent Faisal Islam, Economics Editor, @faisalislamGetty Images

Inflation met the Bank of England's target for the first time in almost three years.

Official figures show prices rose 2% in the year to May, down from 2.3% the previous month.

The economy is a key topic ahead of the July 4 general election, with all major political parties fighting over how to control the cost of living.

The Conservatives said their “difficult decisions” had paid off, but Labor said pressure on families' finances “remains severe”.

The decline in inflation in May was due to a slight decline in food and soft drink prices, while slower growth in prices for recreational, cultural, furniture and household goods.

But gasoline prices are rising again and food prices are still 25% higher than they were at the start of 2022.

The inflation figures come ahead of the Bank of England's latest decision on UK interest rates this Thursday.

The bank is expected to keep interest rates at 5.25%, a 16-year high, for the seventh consecutive session.

Due to stubbornly high price growth in the services sector, the market is not expecting a rate cut before September.

Inflation has fallen steadily since October 2022, when it peaked at 11.1% as Russia's invasion of Ukraine sent food and fuel prices soaring.

But millions of families are still struggling to make ends meet.

Falling inflation does not mean that prices of goods and services are falling overall, but that they are slowing their rise.

The Bank of England also raised interest rates to curb consumer demand and increase mortgage rates and rents.

Official figures on rents, also released on Wednesday, showed the average rent paid to private landlords in England rose 8.7% in the year to June.

Meanwhile, despite falling inflation rates, mortgage rates remain high as lenders wait for the Bank of England to raise interest rates.

‘We cannot pass on all costs to customers’

Gary Wildman said costs have skyrocketed.

Gary Wildman, owner of John Wildman & Sons butcher shop, told the BBC he had seen prices rise at the store he started with his father in Rustington, West Sussex, 31 years ago.

He told the BBC: “Prices are probably 10 to 15 per cent higher than they were at the beginning of the pandemic, but they are certainly at similar levels now.”

But he said some products, like pork, are still rising in price, while the store's energy costs are higher than they were a few years ago.

“You take a hit on your margins,” he said. “You can’t pass all the costs on to your customers or they won’t come in.”

May's inflation figures, the last official economic statistics before the general election, have sparked considerable debate among the major political parties.

The Conservatives argue the figures support their story of economic recovery. But the political question is whether they can take credit for the decline.

Political parties fight over cost of living

Prime Minister Jeremy Hunt said Britain's inflation rate was now lower than “almost all” major economies.

“This would not have happened under Labor, which refused to condemn public sector wage strikes, which would have meant wages rising in line with inflation and inflation lasting longer,” he added.

But Labor continues to raise concerns about the ongoing cost of living crisis.

Labor shadow chancellor Rachel Reeves told the BBC: Unlike Conservative ministers, I will not tell people that everything is fine.

“I know that the cost-of-living crisis is still severe. I know that just because inflation is falling doesn’t mean prices are falling, they’re just rising at a less rapid rate.”

Lib Dem Treasury spokeswoman Sarah Olney said millions of people would be no better off.

“Rishi Sunak’s boasts will ring hollow for countless families whose mortgages are soaring and shopping prices are painfully rising compared to just a few years ago.”

Attempts by politicians to shift blame for high inflation or claim responsibility for falling inflation should be treated with caution.

The surge in living costs is largely due to rising global commodity prices due to the pandemic and Russia's war in Ukraine.

Meanwhile, the decline in inflation was mainly due to 14 interest rate hikes by the Bank of England (BoE), along with lower wholesale energy and food prices.

Inflation in the UK is currently rising at the slowest pace since July 2021.

This is lower than the Eurozone and U.S. interest rates in May, which were 2.6% and 3.3%, respectively.

However, markets have cut expectations that the Bank of England will cut interest rates in August after today's announcement. This is because price growth in the services sector remains high at 5.7% in the 12 months to May.

YaelSelfin, chief economist at KPMG UK, said services inflation was still “uncomfortably high” and would have to continue to fall before banks could cut interest rates.

Sources 1/ https://Google.com/ 2/ https://www.bbc.com/news/articles/cjrrk8j7pwxo The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos