 Economic experts have warned of a 'tough' and 'scary' time ahead for UK households, despite a larger-than-predicted fall in inflation. The Office for National Statistics (ONS) announced this morning that prices are rising at a rate of 7.9% – down from the rate of 8.7% recorded last month. Most analysts were expecting around 8.2% inflation for June – meaning the cost of a basket is on average 8.2% higher than it was a year before – but the true figure was a little below that. However, while the number is going in the right direction, it still means items are getting more expensive. Joe Nellis, Professor of Global Economy at Cranfield School of Management, said: 'The rate at which prices are rising has slowed down, but prices are still rising by 7.9%. That's the key message. 'And food price inflation is still running at an incredibly high rate. 'The Bank of England will celebrate the fact that inflation has come down, but prices are still rising.' Samuel Leach, the director of Samuel and Co Trading, said the fall represented a 'small glimmer of hope', but added that the average household was 'still feeling the pain'. He said: 'They'll get slightly cheaper fuel, but other than that they're still going to see the cost of living crisis, mainly due to interest rates rather than inflationary pressures.' Any lower prices in supermarkets are more likely to be down to retailers cutting profit margins, Samuel Leach said (Picture: Shutterstock) Interest rates, which are raised in order to cut down on people's disposable income with the aim of lowering inflation, are the major sticking point. Last month, the Bank of England put them up by half a percentage point to 5% – higher than they have been for 15 years. As recently as December 2021, the rate was down at 0.1%. Neither expert thought we were at the end of the rate-raising spree yet, with both predicting a 0.25% i){kind=link}
NEWS… BUT NOT AS YOU KNOW IT
Economic experts have warned of a ‘tough’ and ‘scary’ time ahead for UK households, despite a larger-than-predicted fall in inflation.
The Office for National Statistics (ONS) announced this morning that prices are rising at a rate of 7.9% – down from the rate of 8.7% recorded last month.
Most analysts were expecting around 8.2% inflation for June – meaning the cost of a basket is on average 8.2% higher than it was a year before – but the true figure was a little below that.
However, while the number is going in the right direction, it still means items are getting more expensive.