UK inflation rate hits lowest level in four months

The UK inflation rate fell to 3. Food prices increased again in September after a decrease in September. According to the Office of National Statistics (ONS), rising rates are reaching their slowest rate in four months, aided by smaller increases in household energy prices and lower hotel prices. Economists had expected a marginal decrease from September's 3. 8% to 3. 5%. The most recent inflation survey comes just a week before the government's much-anticipated Budget.

After the most recent results were published, Chancellor Rachel Reeves said, I'm determined to do more to bring prices down.I acknowledge that inflation and living costs are still a significant burden on families around the country. One of the Budget's key objectives, according to Reeves, is to include a mixture of tax hikes and budget cuts to support the government budget.

According to the ONS, food and non-alcoholic drinks put the most upward pressure on prices. The 12-month inflation rate for food was 4. 4%. 9% in October, up from 4. 5% in September. Bread, meat, fish, eggs, spinach, chocolate, and confectionary were among the items that increased in price. However fruit prices fell slightly. With the decrease in inflation, prices are rising more slowly than they have been, and it will fuel inflation's hopes that it has diminished, paving the way for lower interest rates. Inflation remains above the Bank of England's 2% target, but the next interest rate decision, set on December 18th, will concentrate on the longer-run consequences of raising the cost of borrowing.

Following changes in the Ofgem energy price cap, inflation eased in October, largely due to higher gas and electricity prices, which were higher than this time last year. Household electricity prices, which are set by the regulator, increased in the year to October. However, the cap's increase by 2% was much less than the 9. 9 percent expected. 6% hike last year. Hotel prices, according to the ONS, was another factor driving down inflation. Hotel rates typically decline between the summer and Christmas, but this year they dropped more than last year. However, fuel prices have risen, impacting drivers and the cost of delivery.

The annual cost of raw materials for businesses continued to rise, but factory gate prices increased,

Mr Fitzner said. Food price inflation was due to increasing costs for ingredients and electricity, as well as regulatory fees such as packaging taxes and rising National Insurance, according to the Food and Drink Federation, which represents food manufacturers.

Relief

If you're wondering what the warm breeze is like, the entire world is heaving a sigh of relief at the news that inflation has dropped for the first time since March,

Sarah Coles, head of personal finance at Hargreaves Lansdown. If interest rates were to decline, lower inflation could also help borrowers, including mortgage holders, if interest rates fell, she said. If there is fear that borrowing rates are rising at a much faster rate, the Bank of England holds borrowing rates higher. With inflation proving sticky at 3. The bank opted to keep interest rates at 4% at its November meeting, up 8% over the last few months. Lower interest rates can help boost growth, which is another of the chancellor's stated goals. Following that, Rob Wood, the chief UK economist at Pantheon Macroeconomics, said he thinks a December interest rate cut is now nailed-on but that a lengthy delay is likely following another cut.

Has inflation peaked?

As better indicators of future price increases, the Bank of England will keep an eye on the underpinning core inflation, which strips out volatile food and electricity prices, and services inflation. Both core and services inflation eased in October, raising concerns that inflation may now be on a downward trajectory. At the Bank's last interest rate meeting in December, it said inflation reached its high in September in September but not to the 4% pinnacle that it had anticipated. However, the longer-term outlook for commodities will be dependent on several variables, including the cost of electricity and commodities, which are affected by global trends and the changing climate. Policies in the forthcoming Budget may also have an effect on inflation. According to rumors, the chancellor might reduce taxes on electricity bills to help lower inflation. Deflationary factors such as budget reductions or tax increases may also have a deflationist effect.

Inflation has been above target every single month since Labour's last Budget,

Shadow chancellor Sir Mel Stride said,

leaving working people off. Daisy Cooper, a Liberal Democrat deputy chief, said the chancellor

mustn't look this tiny gift horse in the mouthand called foremergency steps to cut people's electricity bills" and a VAT cut for the hospitality industry.