How new inflation rate will affect your household budget and spending this autumn
14.09.2022 - 15:03
/ dailyrecord.co.uk
The latest figures from the Office for National Statistics (ONS) show that inflation fell for the first time in nearly a year in August as lower diesel and petrol prices took some pressure off struggling households, but it remains close to its 40-year record. The ONS said Consumer Prices Index inflation reached 9.9% in the year to August, down from 10.1% the previous month.
The ONS said the biggest downward pressure on the inflation rate was the price of motor fuels, which has been falling in recent months. The 6.8% drop in fuel prices was the highest since between March and April 2020, the early days of the pandemic when oil prices briefly went negative on some markets.
Inflation has piled pressure on households around the country, whose cost of living has rocketed, mainly as a result of soaring energy costs. No part of the economy has escaped the energy crisis, which has helped push up prices of food and other items.
Economy experts believe that the support for energy bills announced by the UK Government last week will ensure that inflation does not reach the concerning highs that had been forecast. According to one prediction, CPI inflation could have peaked above 20% as energy bills continued to rise.
But bills will be capped at £2,500 per year for the average household for the next two years, new Prime Minister Liz Truss announced on September 8. Without that support bills had at most been forecast to rise to £7,700 for the average family.
But George Lagarias, chief economist at accountancy Mazars, warned that it will be some time before inflation truly starts dropping off.
He said: “Higher energy prices for all the previous months have fully fed into most supply chains and it will take months of lower oil for
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