UK inflation has dipped below the Government and Bank of England’s 2% target, marking the lowest level in three and a half years. Recent data from the Office for National Statistics (ONS) indicates that the consumer prices index (CPI) stood at 1.7% for September.
Lower costs for petrol and flights have played a significant role in driving down the annual inflation rate last month. However, concerningly for the hospitality and catering sector, food inflation has continued to increase.
The Core CPI, which excludes energy, food, alcohol, and tobacco costs, rose by 3.2% in the year leading to September 2024, a decrease from 3.6% in August.
City analysts predict that the decline in inflation, alongside the recent slowdown reported in the jobs market, will intensify pressure on the Bank of England to reduce interest rates. A reduction of a quarter percentage point to 4.75% is now anticipated from the Bank of England policymakers in November.
