In the year to May Inflation rates have risen at 2% this is a decline from April’s rate of 2.3%.

The fall in inflation is mainly due to a slowdown in food and drinks prices as well furniture and household goods. Despite this good news petrol prices have shot up.

Inflation is not rising at its slowest level since 2021.

 

The Bank of England’s decision

On the 20th June the Bank of England will make their next announcement as to whether they will lower interest rates from their steady rate of 5.25% since last August. This means that borrowing money will become less expensive for companies and peoples. Those looking to take out a mortgage or renew their mortgage this year have been hoping for a interest rate fall and unfortunately reports show the Bank Of England will be holding it at 5.25%.

When inflation rate falls this often signifies that the Bank of England could reduce their rates however, it is looking unlikely this time around.

The pressure of households is still immense and the Bank of England’s high rates helps to reduce the demand and eventually bring prices down further.

 

Good news for the economy

Inflation has now reached the target level after sky rocketing prices since the pandemic, this is great news for the UK economy, if it remains at this level or lower.

The Conservative party will now be patting themselves on the back, but will this be enough for voters to really believe they can hold the economy steady from now on?