UK Inflation Cools Down to its Lowest in 15 Months Since February 2022

By Indu Tyagi Ketan , 13 October, 2023

Inflation in the United Kingdom reached 6.8 percent in July 2023 as per the recent Consumer Price Index (CPI) data. The drop in inflation by 4.3 points compared to 2022 indicates the actual data matches the expected economic calculations done by the agencies.

The UK faced a sudden hike in February 2023, but the inflation rates began falling systematically and continuously. With the rate of interest by the Bank of England from 2.25 to 5.25 in September 2022, the rate has been hiked by 3 points to counter inflation. This strategy applied by the Bank of England has helped a lot in controlling the rising inflation to come down efficiently. If recorded monthly, the consumer prices index has fallen by 0.4 percent in July 2023 compared to 0.6 percent CPI in July 2022. Various reasons contributed to the drop in inflation in the United Kingdom, like declining electricity and gas prices provided the most in fall of inflation, among others. Food prices have also contributed to the downward progress of the inflation in 2023, although the food prices have seen a rise in July 2023 but less in comparison to July 2022. The slight relief in the annual inflation rates in July 2023 affected the price changes in household services. Also, the hotels and passenger air travel have contributed towards the largest balancing upward contributions to the shift inflation rate in July 2023.

Other countries have brought down inflation faster than the United Kingdom. With the falling inflation rate in the country for July 2023, the higher service prices will be balanced with the downfall of goods prices.