Chancellor Rishi Sunak remains optimistic about halving inflation, despite the stubbornly high rate caused by increasing fuel prices. Analysts predicted a slight decrease in the rate, but it held steady at 6.7% last month. While the prices of milk, cheese, eggs, household appliances, and airfares eased in September, the spike in petrol costs by 5.1p per litre to 153.6p infuriated motorists.
Tackling inflation is a top priority
Prime Minister Boris Johnson emphasized that tackling inflation is his number one priority and pledged to stick to the plan to bring it down. Chancellor Jeremy Hunt also expressed confidence that inflation will continue to fall. However, experts warn that Mr. Sunak's goal of reaching a rate of 5.3% by the end of the year may be at risk if Middle East volatility affects the wholesale price of energy.
Bank of England unlikely to raise rates
Despite the high inflation rate, the Bank of England decided to maintain rates at 5.25% last month. Analysts believe it is unlikely that the Bank will raise rates again next month.
State pension increase in question
The government has not confirmed the amount by which the state pension will increase under the triple lock mechanism. The pension currently rises each April by the highest of inflation, wages, or 2.5%. However, there are indications that Ministers may consider excluding bonuses from the wage growth figure, potentially saving around £900 million.
