Team Blitz India
FALLING gas and electricity prices have driven UK inflation to its lowest level in almost three years, as per a BBC report. Prices rose at 2.3% in the year to April, down from 3.2% the month before, official figures show.
While inflation, which measures the rate of price increases over time, has fallen further, it remains higher than the Bank of England’s target of 2% and was slightly higher than experts expected. But the bank has hinted that interest rates, which have been raised in recent years to slow price rises, could be cut this summer. Rates are currently at 5.25% – the highest level in 16 years.
Falling inflation does not mean the prices of goods and services overall are coming down, it is just that they are rising at a slower pace. Lower gas and electricity prices were the main driver behind the sharp inflation drop last month as a lower price cap – which fixes the maximum price that can be charged for each unit of energy – kicked in.
Energy prices were 27% lower in April compared to 12 months before, with gas prices alone down 38%. Easing tobacco and food price rises also contributed to the inflation fall, but costs for mobile phone bills and rents continued to rise.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said for the average household, energy prices were still relatively high.
“It’s still a huge increase on the levels we saw before the invasion of Ukraine – when the cheapest deals cost around half this amount – but it’s a real shot in the arm for anyone trying to make ends meet,” she added. Some foods, such as milk, butter, poultry and fish were cheaper in April than they were a year earlier, due to falling fertiliser prices and tougher negotiations from supermarkets on ownbrand items, Ms Coles explained. But she said olive oil, cocoa and crisps were up because of disappointing harvests and high demand.
