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Figures released by the Office of National Statistics show that the Consumer Prices Index (CPI) for May 2024 was 2%. This is a reduction from the 2.3% assessed in April and means that inflation has hit the Bank of England’s target rate for the first time in nearly 3 years.
The main reason for the drop is food, where prices are falling now but were rising a year ago. However, it is worth noting that food prices are generally still 25% higher than they were at the beginning of 2022.
The main upward pressure on inflation currently is coming from petrol since prices are rising whereas they were falling a year ago.
The fall in inflation doesn’t mean that prices overall are coming down, just that they are rising more slowly.
The Bank of England met on Thursday last week to discuss their interest base rate. This has been set at 5.25% since August 2023 and they decided to maintain that rate. This means no relief yet for borrowers, but in view of the inflation news, a reduction in the base rate is expected within the next few months.
See:
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest
The Prime Minister, Sir Keir Starmer, speaking from Downing Street last Tuesday, has said that the budget in October will be “painful” and the government would be making “big asks” of the country.
HM Revenue and Customs (HMRC) have issued a press release debunking some common myths about whether or not someone needs to register to complete a self-assessment tax return.
