The rate of inflation in the U.K. has fallen to 3.6% in year to October – the lowest in four months
It is though still well above the 2% target, and the gap that had opened up against the euro area giving the Chanvellor worrying news ahead of next week’s budget
Commenting on the figures Rebecca Florisson, Principal Analyst, the Work Foundation at Lancaster University said:
The rate of CPI inflation has dropped to 3.6%. This could indicate we’re past the worst of the recent inflationary surge and may boost hopes of faster interest rate cuts. However, it still leaves millions of workers struggling with day-to-day costs as we approach the Autumn Budget.
“While there may be a small respite from surging prices, the IMF suggests that UK workers are due to face the highest level of inflation in the G7 over the coming years – and the cost of food is 4.8% higher than a year ago. This continues to put pressure on the least well off with only a third of low paid workers (34%) expecting an above inflation pay increase this year, compared to over two thirds of high paid workers (69%).
“With both employers and workers continuing to face inflation at 3.6%, the Government has a significant challenge in terms of how to best support the three million workers on the National Living Wage. At the Budget next week, the Chancellor must prioritise the living standards of lower earners by taking action to tackle the cost of essentials and ensuring that their wages can rise in real terms during the years ahead.”
