Sunak hails falling rate of inflation

The United Kingdom government's pledge in January to half inflation by the end of the year was realized this week, when the latest official figures showed the rate for October had fallen to 4.6 percent, from a high of more than 10 percent.

The month-on-month fall was the fastest for more than three decades.

Prime Minister Rishi Sunak said on Wednesday, as the consumer price index, or CPI, figures were announced, that his promise to tackle inflation had preoccupied him, and called for "hard decisions and fiscal discipline".

"In January, I made halving inflation this year my top priority," he said. "Today, we have delivered on that pledge."

His finance minister, Chancellor of the Exchequer Jeremy Hunt, agreed the government was a large reason why the rate for the year to October plummeted from September's 6.7 percent and from even higher rates in the preceding months that peaked in October 2022 at 11.1 percent.

The BBC quoted Hunt as saying the government had been "disciplined on spending, helping people into work, and resisting calls for additional borrowing".

But some experts said UK inflation, which is now at its lowest rate for two years, was set to fall anyway, regardless of government action, because global energy prices, which had risen sharply after the start of the Russia-Ukraine conflict, had eased back down.

The UK's central bank, the Bank of England, which is independent of the government, also played a large role by raising interest rates to encourage saving and diminish consumer spending, which cooled demand and lowered prices. Interest rates in the UK currently stand at 5.25 percent, which is the highest they have been for 15 years.

James Smith, research director at the Resolution Foundation think tank, which studies the living standards of people on low incomes, said poor families likely will not notice the lower inflation rate.

"Over the past two years, the cost of energy has surged by 49 percent while food prices have risen by 28 percent — far greater than the 14 percent in average earnings over this period," he told the BBC, which means people still have significantly less money in their pockets.

UK inflation is still running at significantly more than the Bank of England's 2 percent target, and remains higher than the rate in the United States, France, and Germany, which is 3.2 percent, 4.5 percent, and 3 percent, respectively.

The Guardian newspaper said the UK's opposition Labour Party said the government should not celebrate the fall in the inflation rate, given that two years of rising prices have left "working people worse off, with higher mortgage bills, prices still rising in the shops, and inflation twice as high as the Bank of England's target".