Relief over inflation, but what now for the Budget?
Summary
Inflation in the UK was lower than expected last month, at 3.8%, which is good news for households and the government. However, it is still above the Bank of England's target, and some areas, like services, have seen big price increases. The government may offer new relief in the upcoming Budget to help with costs, especially energy bills.Key Facts
- Inflation in the UK was 3.8% for the year to September, lower than feared.
- The Bank of England's inflation target is 2%, so current numbers are still above target.
- Services, such as hotels and restaurants, have seen significant price increases.
- Food prices dropped in September, easing somewhat after previous highs.
- Wage growth is faster than inflation, helping ease the cost-of-living pressure.
- Chancellor Rachel Reeves hinted at possible help for energy bills in November's Budget.
- Businesses are concerned that more tax increases could lead to higher inflation.
- Interest rate cuts are not likely soon, but a possible cut might happen in December.
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