Inflation as measured by the consumer prices index (CPI) in the 12 months to October 2023 has fallen to its lowest rate since November 2021 and now stands at 4.6%, down from 6.7% the previous month, the fastest monthly change in the annual rate for four decades.
The retail prices index (RPI), which trade unions often cite in pay negotiations, fell to 6.1% over the year to October, down from 8.9% in September. The consumer prices index including owner-occupier housing costs (CPIH) stood at 4.7% in the 12 months to October, down from 6.3% in September.
Prime minister Rishi Sunak said: “Official figures released this morning confirm we have halved inflation, meeting the first of the five priorities I set out at the beginning of this year.
“But while it is welcome news that prices are no longer rising as quickly, we know many people are continuing to struggle, which is why we must stay the course to continue to get inflation all the way back down to 2%.”
Labour’s shadow chancellor Rachel Reeves said: “Now is not the time for Conservative ministers to be popping champagne corks and patting themselves on the back.
“After 13 years of economic failure under the Conservatives, working people are worse off with higher mortgage bills, prices still rising in the shops and inflation twice as high as the Bank of England’s target.”
Inflation October 2023
James Smith, research director at the Resolution Foundation, said: “Inflation fell at its fastest annual rate in over four decades last month, as last year’s surge in energy bills fell out of the data.
“Such a sharp fall will be welcomed by policy makers and the wider public alike. But the cost-of-living crisis is far from over as the scale of Britain’s inflation shock has left a legacy of far higher prices.”
Ben Harrison, director of the Work Foundation at Lancaster University, said: “Wage growth in sectors such as hospitality and tourism – where insecure jobs tend to be concentrated – remains lower than average and workers in these jobs are more likely to be impacted by high food inflation which is still at 10.1%.
“Recent research from the Work Foundation and the Chartered Management Institute shows that nearly half of insecure workers could not pay an unexpected bill of £300 in the next week, and one in three insecure workers expect to lose their job in the next 12 months.”
Dr George Dibb, head of the Centre for Economic Justice at Institute for Public Policy Research, said: “Today’s data doesn’t herald the end of the cost-of-living crisis by any stretch of the imagination. Prices today are on average more than 15 per cent higher than they were in November 2021. Many households will still be struggling to make ends meet with these higher costs.
“One of the starkest cases is housing costs – 120,000 households renewed their fixed term mortgages every month in 2023. This is because the majority are increasing from below 2% interest rates which will remain high for a long time. That’s almost 4,000 people newly hit by a disposable income squeeze every single day.”
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