UK inflation has fallen to 2.3%, just above the Bank of England’s target of 2% and the lowest level for three years, according to the latest figures from the Office for National Statistics.
Falling gas and electricity prices drove the drop, which is down from 3.2% in March, although experts warned that prices were still rising, but just at a slower rate than they were previously.
However, it does mean a cut in interest rates in the summer is now more likely.
David Bharier, Head of Research at the British Chambers of Commerce, said: “The data showing CPI inflation is at 2.3% is positive news that should help settle nerves and increase the likelihood of an interest rate cut in the coming months.
“Other recent data would support a rate cut, with the economy growing by a larger than expected 0.6% in the first quarter and signs the labour market is cooling. However, this has been a four-year inflation crisis and prices are not falling, only going up at a slower rate.
“Uncertainty will persist with global conflicts and trade wars threatening supply chains. Real wage costs also continue to grow – our most recent business survey found almost half of firms expect their prices to rise over the next three months, with labour costs cited as the main driver.
“While the outlook may have brightened, the skies aren’t yet fully clear. UK firms need to see a long-term vision for the UK economy from politicians, including action on making trade easier, especially with the EU.”
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