Inflation in Britain fell unexpectedly in August to its lowest level since the start of Russia’s invasion of Ukraine, which led to sharp rises in energy and food costs.
FILE - View at the Bank of England, at the financial district in London, Thursday, May 11, 2023. The Office for National Statistics said Wednesday, Sept. 20, 2023 that inflation, as measured by the consumer prices index was 6.7% in the year August, down from 6.8% in July. The decline took inflation to its lowest level since February 2022. – Inflation across the U.K.
It said that lower hotel and air fare costs and a moderation in food price rises. They helped offset an increase in energy prices on the back of higher crude oil prices. Though the surprise decline was encouraging, inflation remains way above the Bank of England's target rate of 2% and higher than any other Group of Seven major advanced economy. As a result, most economists think it will raise its main borrowing rate once again on Thursday by a quarter of a percentage point to a near 16-year high of 5.5%.
“This will strengthen the case that the Bank’s fourteen consecutive interest rate rises are now showing clear signs of putting downward pressure on inflation, and that its rate-rising cycle will soon end,” said James Smith, research director at the Resolution Foundation think tank., though. Unlike in the U.S.
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