Britain’s inflation dropped to 7.9% in June, but the Bank of England’s target of bringing it down to 2% remains elusive.
Inflation in the UK fell to 7.9% in June, following the slow drop from the peak last year, according to new figures from the Office for National Statistics.
The inflation rate fell more than the prior forecasts, which predicted the fall to be around half a percentage point from May’s 8.7%.
A drop in fuel prices accelerated the fall, as a record rise in energy bills has soared the cost of living following Russia’s invasion of Ukraine in February 2022.
“A larger than expected fall in headline price rises in June is certainly welcome but it’s also important not to overinterpret monthly swings in inflation in either direction,” Joseph Rowntree Foundation’s Chief Economist Alfie Stirling said.
Despite a drop from May, food and non-alcoholic beverage inflation remains stubbornly high at 17.4%.
With wages struggling to mirror the rate of price hikes, high inflation rate in essential goods possess the greatest risks to low-income families, Stirling said.
“We must recognise we are still in the belly of this crisis. For the 5.7 million low-income families in this country already forced to eat less or skip meals, inflation at close to 8% and food inflation above 17% will come as precious little comfort overall,” he added.
UK’s inflation figures reached peaked at 11.1% last October and stood at more than 10% at the beginning of 2023.
High inflation rate has battered the UK’s economy, with the latest figures showing “no growth” in three months.
Prime Minister Rishi Sunak pledged to halve inflation and “grow the economy”, as a part of the Conservative Government’s five pledges at the start of the year.
An ambitious plan devised by the Bank of England, on the other hand, aims to keep inflation in check at 2%.
The rising rate of interest will continue to haunt the low-income family which demands a more holistic approach to tackling the cost-of-living crisis, Stirling added.
“They should rebuild the UK’s income safety net so that it reflects the actual cost of essentials, and invest in ways to reduce the UK’s future exposure to price increases across the economic system,” he said.
The UK has a higher inflation rate compared to other advanced economies with Germany and Italy’s inflation rates remaining below 7%, while France’s inflation rate maintained 5.3% in June.
Source: Euro News
