On Wednesday, the UK’s consumer price inflation rate revealed a welcome fall in July, reaching its lowest level in 17 months.
Lower energy costs contributed significantly to the decline, which offered some comfort to households struggling with the ongoing cost of living issue.
Although this development is positive, the Bank of England (BoE) regularly monitors key indicators, and their persistently high levels have raised expectations that the central bank will continue its program of interest rate increases.
The annual rate of inflation, as measured by the consumer price index (CPI), reached 6.8% in July, according to data from the Office for National Statistics (ONS).
This figure represents a significant drop from June’s 7.9% rate, aligning with economists’ predictions.
The decline in the headline inflation figure is a step away from the 41-year high of 11.1% recorded in October, but it still remains well above the central bank’s target of 2%.
The reduction in inflation was primarily attributed to lower gas and energy prices, as the sharp increases observed in the previous year were no longer impacting the annual comparison.
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