The UK's rate of inflation stayed at 6.7% in September, according to the Office for National Statistics (ONS). The Consumer Price Index level of inflation remained the same as in August. Meanwhile, the Consumer Price Index including owner occupiers' housing costs also rose by 6.3% in the 12 months to September, unchanged from August.
Inflation Has Remained the Same
In the year to September 2023, the cost of raw materials fell by 2.6%, down from a fall of 2.0%. Additionally, the cost of goods leaving factories fell by 0.1%, up from a fall of 0.5%. Grant Fitzner, ONS chief economist, commented on the inflation figures, stating that annual inflation was unchanged in September after last month's fall.
Chancellor of the Exchequer's Response
Chancellor of the Exchequer, Jeremy Hunt, emphasized the importance of sticking to the plan to lower inflation. He stated that if the plan is followed, inflation is expected to continue falling this year, which will ease the pressure on families and businesses.
Understanding Inflation
Inflation is a measure of how the price of goods and services has changed over the past year. In June, the rate of inflation dropped to 7.9% from its previous 8.7% in May. The ONS attributed this drop to falling prices of motor fuel. In July, the rate further decreased to 6.8%, the slowest rate drop since February 2022. August saw another drop to 6.7%, partly due to the fall in the cost of hotel stays or flights. However, the prices of petrol contributed to the largest upward change in annual rates.
Impact on Your Money
High inflation means that the cost of everyday essentials is rising, which reduces the purchasing power of your money. While a drop in inflation doesn't mean prices have stopped rising, it indicates a slower rate of increase. The Bank of England can hike its base rate to try and bring inflation down, which can benefit savers. However, it also leads to higher interest rates on mortgages, putting more pressure on homeowners. Ben Thompson, Deputy CEO of the Mortgage Advice Bureau, stated that with unchanged inflation, it is unlikely that interest rates will drop further in the near future.
Did you miss our previous article…
https://hellofaread.com/money/from-selling-3-sweets-to-a-22m-business-the-inspiring-story-of-luke-massie/
