Inflation has fallen once more, with the Consumer Prices Index (CPI) rising by just 1.7 percent year-on-year as of September 2024, down from the previous peak. This decline is primarily due to waning effects of external shocks such as the Covid pandemic and the Ukraine invasion, with food price increases and energy costs stabilizing, even though the situation remains complex.
Despite the drop in the overall CPI, core inflation, which excludes volatile items, hasn't decreased as significantly. This indicator is crucial for the Bank of England, showing that while some relief is happening, inflation pressures still persist, reflected in certain areas like rising food costs. The mixed signals complicate the economic landscape as policymakers gear up for critical budgeting decisions.
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