"We think it will reduce inflation by between 0.4% and 0.5% for a year from the second quarter of 2026. That is purely a mechanical effect of the changes in energy prices, fuel duty, lesser electric vehicles and rail. That will just shift inflation. That is by far the biggest impact for us."
"In her second Budget as chancellor, Reeves extended a 5p cut in fuel duty until September next year. She also removed green levies from energy bills and general taxation in a move the Treasury said will save households 88 per year, while scrapping a customer-funded scheme to help low-income households insulate their homes, saving a further 59."
"The government has also frozen rail fares until March 2027, the first freeze in decades. Typically rail fares rise in January based on the July rate of the retail price index (RPI) + 1%."
The Bank of England assesses the Budget measures will reduce inflation by 0.4–0.5% for a year beginning in the second quarter of 2026. The Office for Budget Responsibility forecasts a 0.4% reduction. UK inflation stands at 3.5%, with the OBR projecting 2.5% next year and a return to the 2% target from 2027. Measures include extending a 5p fuel duty cut, removing green levies from energy bills and general taxation, freezing rail fares until March 2027, and cancelling a customer-funded insulation scheme. A road charge for electric and plug-in hybrid cars will start in April 2028.
Read at www.bbc.com
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