Economy: Inflation Falls to 5%

Fall in food prices helped push down inflation

Fall in food prices helped push down inflation

Inflation in the UK fell slightly in October, down to 5 percent from September’s 5.2 percent.

The numbers are taken from the Consumer Prices Index (CPI), one of the systems to calculate the rise in the cost of living in Britain.

The Retail Prices Index (RPI), which typically shows higher figures, also fell in October. It now stands at 5.4 percent from September’s 5.6 percent.

Prices fall

Figures indicate that UK customers were given a reprieve from soaring inflation with falls in the price of food, fuel, and air transport. The dips in these commodities helped push the inflation rate lower.

However, critics say that despite the slight drop, the 5 percent rate remains unacceptably high and puts too much of a burden on working families in Britain. Critics also point out that the current “dropped” rate is well over double the Bank of England’s target rate of inflation, which is 2 percent.

A spokesperson from the government has also recognised that inflation continues to remain high despite the fall. The Treasury also blamed “conditions in the global oil and gas markets” for the squeeze that continues to take hold of UK households.

However, the government plans to increase the fuel duty by 3p per litre in January. This has prompted MPs to debate a motion which urges the government to limit its petrol price increases.

Cost of living

According to the Office for National Statistics, food prices were driven down not by a stabilising economy, but by good harvests and heavy supermarket discounting. In an increasingly squeezed economy, individuals are staying home and cutting spending on everything but food, leading to fierce competition in the groceries market.

Air fares also fell 6 percent compared with last year.

The ONS also says that the price of petrol fell by 0.5p per litre due to a weakening global economy, which saw the price of crude oil fall.

However, not all price changes were good news for consumers, as upward pressure came from increases in the cost of clothing, electricity, and gas.

Domestic fuel bills have skyrocketed due to price rises from all major energy suppliers. Because of this, November’s inflation figures are predicted to be pushed back up from October’s small reprieve.

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