The UK's rate of inflation remained at 4% in January, according to figures from the Office for National Statistics (ONS). This comes as a blow for household budgets, as many economists were predicting another rise in inflation. Inflation is a measure of how the price of goods and services has changed over the past year. The ONS reported that food prices fell for the first time since September 2021, and the largest downward push on inflation came from furniture and household goods. However, the price of gas and electricity rose at a higher rate than last year, contributing to the overall inflation rate.
What it means for your money
High inflation means that the cost of everyday essentials, such as food and energy, is rising. This means that your money doesn't go as far. The flat inflation rate will be disappointing for mortgage holders and prospective buyers hoping for interest rate cuts to alleviate the impact of high mortgage rates. Many households may be feeling financially squeezed, especially with higher living costs compared to a few years ago. It is advised to keep emergency funds topped up and spending constrained in order to weather any further financial shocks.
On a positive note, there was a small fall in food inflation, which may provide some relief to struggling households. This decrease is attributed to supermarket price wars and loyalty scheme discounts. However, the uncertain economic climate suggests that it is crucial to remain cautious with spending and prioritize financial stability.
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