This article is from the source 'bbc' and was first published or seen on . The next check for changes will be
You can find the current article at its original source at https://www.bbc.co.uk/news/business-12196322#8
The article has changed 14 times. There is an RSS feed of changes available.
Version 7 | Version 8 |
---|---|
UK inflation rate: How fast are prices rising? | |
(8 days later) | |
Prices in the UK rose by 2.3% in the year to April 2024 - the lowest rate since September 2021. | |
However, this is still above the Bank of England's 2% inflation target, so it is not yet clear whether the Bank will decide to cut interest rates when it meets in June. | |
LIVE: UK inflation falls to 2.3% as energy prices cool | |
LIVE: UK inflation falls to 2.3% as energy prices cool | |
What does inflation mean? | What does inflation mean? |
Inflation is the increase in the price of something over time. | Inflation is the increase in the price of something over time. |
For example, if a bottle of milk costs £1 but is £1.05 a year later, then annual milk inflation is 5%. | For example, if a bottle of milk costs £1 but is £1.05 a year later, then annual milk inflation is 5%. |
How is the UK's inflation rate measured? | How is the UK's inflation rate measured? |
The prices of hundreds of everyday items, including food and fuel, are tracked by the Office for National Statistics (ONS). | The prices of hundreds of everyday items, including food and fuel, are tracked by the Office for National Statistics (ONS). |
This virtual "basket of goods" is regularly updated to reflect shopping trends, with vinyl records and air fryers added in 2024, and hand sanitiser removed. | |
The ONS monitors price changes over the previous 12 months to calculate inflation. | |
The main inflation measure is called the Consumer Prices Index (CPI), external. | |
CPI fell in April largely because of falling gas and electricity prices as a result of a drop in the energy cap. | |
Why are prices still rising? | Why are prices still rising? |
Inflation has fallen significantly since it hit 11.1% in October 2022, which was the highest rate for 40 years. | |
However, that doesn't mean prices are falling - just that they are rising less quickly. | |
Inflation remained above the Bank of England's 2% target partly because of high energy and food prices. | |
Worker shortages have also made it more expensive to find and keep staff, external. | |
Inflation soared in 2022 because oil and gas were in greater demand after the Covid pandemic. Energy prices surged again when Russia invaded Ukraine, cutting global supplies. | |
Why inflation is worse for some people than others | Why inflation is worse for some people than others |
Why inflation is worse for some people than others | Why inflation is worse for some people than others |
How much are prices rising for you? Try our calculator | How much are prices rising for you? Try our calculator |
How much are prices rising for you? Try our calculator | How much are prices rising for you? Try our calculator |
Why does putting up interest rates help to lower inflation? | Why does putting up interest rates help to lower inflation? |
The Bank of England uses interest rates to try and keep inflation at 2%. | |
When inflation was well above that target, it increased interest rates to 5.25%. | |
The idea is that if you make borrowing more expensive, people have less money to spend. People may also be encouraged to save more. | |
In turn, this reduces demand for goods and slows price rises. | In turn, this reduces demand for goods and slows price rises. |
But it is a balancing act - increasing borrowing costs risks harming the economy. | But it is a balancing act - increasing borrowing costs risks harming the economy. |
For example, homeowners face higher mortgage repayments, which can outweigh better savings deals. | For example, homeowners face higher mortgage repayments, which can outweigh better savings deals. |
Businesses also borrow less, making them less likely to create jobs. Some may cut staff and reduce investment. | Businesses also borrow less, making them less likely to create jobs. Some may cut staff and reduce investment. |
When will inflation and interest rates go down? | When will inflation and interest rates go down? |
In May, the Bank of England held rates at 5.25% for a sixth time. | In May, the Bank of England held rates at 5.25% for a sixth time. |
Governor Andrew Bailey said the BoE needed to "see more evidence" that price rises had slowed but that he was "optimistic that things are moving in the right direction". | Governor Andrew Bailey said the BoE needed to "see more evidence" that price rises had slowed but that he was "optimistic that things are moving in the right direction". |
He said the BoE expected inflation to fall "close" to its 2% target in the next couple of months. | He said the BoE expected inflation to fall "close" to its 2% target in the next couple of months. |
The next inflation figures are released on 19 June and the next interest rate decision is 20 June. | |
What are UK interest rates and when will they fall? | What are UK interest rates and when will they fall? |
What are UK interest rates and when will they fall? | What are UK interest rates and when will they fall? |
What a falling inflation rate means for your finances | What a falling inflation rate means for your finances |
What a falling inflation rate means for your finances | What a falling inflation rate means for your finances |
Rates should be cut to 3.5% by end of 2025, IMF says | |
Rates should be cut to 3.5% by end of 2025, IMF says | |
Are wages keeping up with inflation? | Are wages keeping up with inflation? |
Wages are rising faster than prices, official figures show. | |
Pay, excluding bonuses, grew by 6% in the first three months of 2024, compared with the same period a year before. | Pay, excluding bonuses, grew by 6% in the first three months of 2024, compared with the same period a year before. |
After taking inflation into account, it means pay went up by 1.9%. | After taking inflation into account, it means pay went up by 1.9%. |
Five tips when asking for a pay rise | Five tips when asking for a pay rise |
Five tips when asking for a pay rise | Five tips when asking for a pay rise |
How to get a job: Six expert tips for finding work | How to get a job: Six expert tips for finding work |
How to get a job: Six expert tips for finding work | How to get a job: Six expert tips for finding work |
What is happening to inflation and interest rates in Europe and the US? | What is happening to inflation and interest rates in Europe and the US? |
Many other countries have also seen inflation and higher interest rates. | Many other countries have also seen inflation and higher interest rates. |
At 2.3%, UK inflation has finally dropped below the rate for countries using the euro, which was 2.4% in April, the same as in March. | |
The European Central Bank raised its key interest rate to a record high 4% in September and has left it there. | The European Central Bank raised its key interest rate to a record high 4% in September and has left it there. |
In the US, inflation hit 3.4% in the 12 months to April, down from 3.5% in March. | |
The US central bank has kept its key interest rate at between 5.25% and 5.5% since July 2023. | |
Related Topics | Related Topics |
Economics | Economics |
Personal finance | Personal finance |
Inflation | Inflation |
Cost of Living | Cost of Living |
UK economy | UK economy |
Bank of England | Bank of England |
Pay | Pay |