As a result of decreases in the price of gas and electricity, the annual inflation rate in the United Kingdom drops dramatically in October, coming in at 4.6%. This outcome was significantly better than the estimates provided by the City.
The reading for the consumer prices index (CPI) for October dropped dramatically from 6.7% in September to 4.8% in October, which was much lower than the 4.8% that was expected by a survey of analysts done by media. The reading for September was 6.7%.
The decrease does not indicate that prices are going down; rather, it just indicates that they are increasing at a lesser rate than they were before increasing. In spite of this, it is anticipated that it will allay fears that the Bank of England will hike interest rates once again this year, despite the fact that it is more than twice the 2% target that it had set for itself.
It also means that Rishi Sunak has fulfilled his objective, which he set in January, of cutting inflation by half by the end of the year, beginning from an average of 10.7% in the fourth quarter of 2022. This target was set to be accomplished by the end of the year.
The price cap on energy decreased by 23% year-on-year for the typical annual gas and electricity bill, bringing it down from £2,500 in October of the previous year to £1,923 in the same month this year. This brought the price restriction on energy down from £2,500 in October of the previous year. This was the most important aspect that led to the decrease.
When compared to the price that they had been in October 2021, the cost of food was around thirty percent higher in October 2023.