23 May 2024 05:31 am Views - 171
BBC: Falling gas
Prices rose at 2.3 percent in the year to April, down from 3.2 percent the month before, official figures show.
While inflation, which measures the price of something over time, has fallen further, it remains higher than the Bank of England’s target of 2 percent and was slightly higher than experts expected.
But the Bank has hinted that interest rates, which have been raised in recent years to slow price rises, could be cut this summer. Rates are currently at 5.25 percent - the highest level in 16 years.
Falling inflation does not mean the prices of goods and services overall are coming down, it is just that they are rising at a slower pace.
Lower gas and electricity prices were the main driver behind the sharp inflation drop last month as a lower price cap - which fixes the maximum price that can be charged for each unit of energy - kicked in.
Energy prices were 27 percent lower in April compared to 12 months before, with gas prices alone down 38 percent.
Easing tobacco and food price rises also contributed to the inflation fall but costs for mobile phone bills and rents continued to rise.
Sarah Coles, head of personal finance at Hargreaves Lansdown said for the average household, energy prices were still relatively high.
“It’s still a huge increase on the levels we saw before the invasion of Ukraine - when the cheapest deals cost around half this amount - but it’s a real shot in the arm for anyone trying to make ends meet,” she added.
Some foods, such as milk, butter, poultry and fish were cheaper in April than they were a year earlier, due to falling fertiliser prices and tougher negotiations from supermarkets on own-brand items, Coles explained.
But she said olive oil, cocoa and crisps were up because of disappointing harvests and high demand.
Prime Minister Rishi Sunak said the figures marked a “major moment for the economy, with inflation back to normal”.
“Brighter days are ahead but only if we stick to the plan to improve economic security and opportunity for everyone,” he added.
But Labour’s shadow chancellor Rachel Reeves said now was “not the time for Conservative ministers to be popping champagne corks and taking a victory lap”.