UK inflation hits 1.7%, lowest in three years as rates cut
BBC News reports that prices in the United Kingdom rose by 1.7% over the 12 months to September, marking the lowest rate in three and a half years. In October, the Bank of England indicated it might adopt a more aggressive stance in cutting borrowing costs if inflation remains manageable.
Prices in the United Kingdom rose by 1.7% from 12 months to September, marking the lowest rate in three and a half years. The Bank of England aims to maintain inflation at 2% by adjusting interest rates. In November, these were reduced to 4.75%, writes BBC News.
The lowest inflation in the UK for years
Inflation has fallen significantly since October 2022, when it was at 11.1%. The rise in energy prices following the pandemic and Russia's invasion of Ukraine contributed to this. Although food prices have dropped, the service sector continues to experience price increases.
The Bank of England uses interest rates to keep inflation at 2%. In November 2024, rates were reduced to 4.75%. Governor Andrew Bailey announced further cuts but warned against implementing them too hastily, reports BBC News.
The International Monetary Fund warns that persistent inflation may necessitate keeping interest rates high. In October, Bailey suggested that the Bank of England might be more aggressive in reducing borrowing costs if inflation remains under control.
