A sharp interest rate rise in the coming months is now less likely that experts had previously predicted. It's after a surprise drop to the rate of inflation was recorded for the month of June. What will it mean for households here in the UK? Here's our guide to everything you need to know about the recent inflation drop.
Category
đź—ž
NewsTranscript
00:00 The latest data for June has shown that the rate of inflation has dropped to 7.9% last
00:05 month down from 8.7% in the previous month. That's the lowest level in nearly a year.
00:11 It comes as a surprise as experts were previously predicting continued increases. It means that
00:17 interest rate hikes are likely to be smaller than previously thought, a welcome relief
00:21 for UK households. A drop to the price of fuel has played a part in the slowing of the
00:25 rate in June, with similar scenes at supermarkets. Food prices also increased at a slower rate
00:31 last month. But it's not all good news. The figure is still four times the target set
00:35 by the Bank of England. They're looking for inflation to drop down to 2% ideally. Our
00:40 current rate is also much higher than other developed countries across the globe. Grant
00:45 Fitzner, chief economist at the Office for National Statistics, said "It is a large
00:49 drop but let's not forget that last month we saw no change at all in headline inflation.
00:53 So in some ways what we're seeing is catching up with the falls we've seen in other similar
00:57 countries."
00:58 [BLANK_AUDIO]