Charlotte Hawkins Breaks News on Inflation Slowdown: ‘1.7 Percent, Below Bank of England’s Target’
Charlotte Hawkins delivered significant economic news on Good Morning Britain, revealing that inflation had slowed to 1.7 percent in September, told The Mirror. This marked the first time in nearly three years that inflation dropped below the Bank of England’s 2 percent target. The development was elaborated on by Jonathan Swain, reporting from Penge, who explained the implications of the data.
“It doesn’t mean things are getting cheaper,” Swain clarified. “It means prices are not rising as fast as they once were. I’ll take you back to October 2022 when inflation was at 11 percent, and that rate has now dropped to 1.7 percent.”
However, Swain noted that despite the lower inflation rate, mortgage rates might not follow the same trend. “Normally, when inflation rates come down, you expect mortgage rates to come down as well. However, that is not necessarily the case,” he explained.
The September inflation figure is particularly crucial, as it will be used to adjust numerous benefit payments, including Universal Credit, in April. These adjustments will affect key support mechanisms, including personal independence payments, attendance allowance, and disability living allowance, as well as carer’s allowance, according to The Express.
The Office for National Statistics (ONS) highlighted a significant drop in motor fuel and lubricant prices, which decreased by 10.4% compared to September 2023. The reduction in airfares following the summer travel season also contributed to the overall drop in inflation.
On the other hand, households are still facing elevated prices for food and non-alcoholic beverages, with notable price increases in milk, cheese, eggs, and fruit. Darren Jones, Chief Secretary to the Treasury, acknowledged the slower pace of price rises as “welcome news for millions of families.” He added, “However, there is still more to do to protect working people, which is why we are focused on bringing back growth and restoring economic stability to deliver on the promise of change.”
Interestingly, core inflation, which excludes volatile items like energy, food, alcohol, and tobacco, also saw a decline, sitting at 3.2% in September, down from 3.6% in August. Goods prices fell at a faster rate, dropping to -1.4% last month from -0.9% in August, while services inflation, which had spiked during the summer due to the so-called “Taylor Swift effect,” also slowed from 5.6% to 4.9%.
These combined factors suggest the possibility of an interest rate cut in November, with some experts predicting a reduction of 0.25 percentage points. Speculation of another cut in December remains on the table as well.