UK inflation falls to 3.2%
The last mile to the 2% target may feel like the longest to Britons who have endured daily battles against rising prices, writes Myron Jobson.
17th April 2024 07:43
by Myron Jobson from interactive investor
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Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “While the latest reading is marginally higher than expected, inflation continues to move in the right direction with the cooling of the areas of inflation that are most felt by Britons, such as food, stoking a sense of optimism over where prices are heading.
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“Things are looking up, but the last mile to the Bank of England’s 2% target may feel like the longest to Britons who have endured daily battles against rising prices.
“After stripping out volatile food and fuel costs for a better sense of the underlying trend, core inflation came in at 4.2%, down from 4.5% in February. This reading matters because Bank of England policymakers monitor it to get a sense of inflation’s momentum and it is one of the key considerations when it comes to setting interest rates.
“Barring any unforeseen developments, a steeper decline in inflation is on the cards for next month’s reading, which will factor in the fall in the Ofgem Energy Price Cap, which is expected to drive inflation below the 2% target level.
“While the cost-of-living squeeze on personal finances continues to ease, the battle against inflation is not yet won. This reality, in tandem with the risks of higher-for-longer interest rates, underpins the importance of keeping a keen eye on your finances and making the necessary adjustments to maintain financial resilience.
“Remember, falling inflation doesn’t mean that prices are falling, but that, on average, they aren’t climbing as quickly.”
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