UK Inflation Drops To 4.6%

London: 15 November 2023 (TraderMade): In a significant development, the UK's annual inflation rate dived sharply to 4.6% in October, surpassing predictions, primarily attributed to a decline in gas and electricity costs.

Last month's Consumer Prices Index (CPI) reading dropped from September's 6.7%. This reduction does not signify a decrease in prices but rather a slower rate of increase.

It is expected to decrease concerns about the Bank of England opting for another interest rate hike this year despite inflation exceeding its 2% target.

The core inflation rate, excluding volatile elements like energy and food, also saw a more significant decline than anticipated. The Office for National Statistics (ONS) reported a decrease from 6.1% to 5.7%, slightly below the 5.8% projection by the Bank of England.

Economists attributed the decline to a global impact on core goods inflation, which slowed from 4.7% to 4.3%. Services inflation, a key indicator for the Bank of England, also dropped from 6.9% to 6.6%, surpassing the bank's forecast of 6.9%.

Central to October's CPI decline was a notable 23% year-on-year reduction in the energy price cap, bringing the typical annual gas and electricity bill down from £2,500 in October 2022 to £1,923 in the same month this year.