UK inflation falls less than expected to 2.3% after interest rate warning was issued – live

Hunt attacks Labor and says he is disproving the ‘myths’ that the economy is worse under the Tories

Economists warn the Bank of England could delay a rate cut after inflation falls less than expected.

Consumer price index inflation fell to 2.3% in April from 3.2% in March – the lowest level in almost three years – but above the 1.9% forecast by some analysts to 2.1%.

Rishi Sunak, the Prime Minister, said the figures were an “important moment” for the economy, but Rachel Reeves, the shadow chancellor, warned him that this was not the time for a “victory lap” as families continued to struggle with the crisis in the cost of living. .

The NIESR think tank said the fall in inflation was “good news” but wages were still catching up with post-pandemic price increases.

NIESR economist Paula Bejarano Carbo added that persistent core inflation and strong wage growth data suggested the Bank “could exercise caution at its upcoming meeting and maintain interest rates despite today’s encouraging decline in nominal rates .”

Suren Thiru, director of economics at the Institute of Chartered Accountants in England and Wales, said a June cut was now “unlikely”.

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ICYMI: Martin Lewis explains what the fall in inflation means for interest rates

Martin Lewis explains what a drop in inflation means for interest rates

British inflation fell to the lowest level in almost three years in April as energy prices continued to fall, according to official figures. Consumer price index (CPI) inflation slowed to 2.3 percent in April, down from 3.2 percent in March, according to the Office for National Statistics (ONS). It is the lowest level since July 2021, when inflation was recorded at 2 percent – the Bank of England’s target level. Financial guru Martin Lewis explained on Wednesday (May 22) what this drop means for you in terms of interest rates.

Matt MathersMay 22, 2024 10:49 am

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BT has been fined £2.8m over contract failures for 1.1m EE and Plusnet customers

BT has been fined £2.8 million by the industry watchdog after EE and Plusnet failed to provide clear and simple contract information to more than a million customers before they signed up.

Ofcom said BT’s EE and Plusnet businesses have made more than 1.3 million sales since June 2022 without providing customers with a contract summary and information documents, affecting at least 1.1 million customers.

Matt MathersMay 22, 2024 10:06 am

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The average house price rises by 1.2%…while rents skyrocket by 8.9%

Average British house prices rose by 1.8 percent in the 12 months to March, according to official figures.

The Office for National Statistics (ONS) said it has increased the average house price in the UK to £283,000.

It marked a recovery in prices after house prices fell 0.2 percent in the 12 months to February.

Meanwhile, the ONS also revealed that private rents in Britain rose by 8.9 percent in the 12 months to April, while house price inflation slowed slightly from the year’s 9.2 percent growth until March.

ONS chief economist Grant Fitzner said: “Average UK house prices have risen this year for the first time since last summer.

“House prices rose annually in every country and region except London and the South East, with Scotland showing the fastest annual growth.

“After two years of unprecedented and generally accelerating annual growth, private rent price increases showed tentative signs of easing.

“Most countries and English regions saw a slowdown, with a notable easing in London.”

Matt MathersMay 22, 2024 10:00 am

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Economy ‘not yet out of trouble’ – shadow finance minister

Today’s inflation figures show the economy is “not out of the woods yet”, said Labour’s shadow finance minister Darren Jones.

The MP for Bristol North West said inflation is moving “in the right direction” but there is still more work to be done.

He told Sky News: “Core inflation is still around 3.6 to 3.9 percent, which is higher than markets expected. This isn’t out of the woods yet. Things are going in the right direction, but much more needs to be done.”

Mr Jones pointed to Labour’s “securonomy” agenda, which includes measures to build “own, secure, renewable energy”.

The shadow minister said: “The only reason the headline inflation rate has fallen closer to 2 per cent today, even if the cost of other things remains slightly too high, is because of energy bills.

“The problem is that if something happens in the world and gas prices skyrocket again, we will end up in that inflationary environment again with very high bills.”

Matt MathersMay 22, 2024 09:48

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Hunt does not want to be influenced by a possible interest rate cut

Jeremy Hunt refused to get involved when he thought the Bank of England would cut interest rates.

The chancellor said the central bank would cut interest rates if it was “confident that it would achieve its target in a sustainable manner”.

Analysts said the Bank was likely to be more cautious about a possible cut in June as inflation fell less than expected.

Matt MathersMay 22, 2024 09:35

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Reeves: Labor will be ‘much more ambitious’ than the government

Labor will be “much more ambitious” on the economy than the government if it wins the election, Rachel Reeves has said.

The shadow chancellor said her party would “bring stability back to our economy” and invest more in renewables.

She said Labor would invest more in “homegrown renewable energy sources so we can reduce our reliance on Putin and dictators around the world for our basic energy needs and reduce energy bills for families and pensioners”.

File photo: Rachel Reeves (Victoria Jones/PA Wire)

Matt MathersMay 22, 2024 09:25

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The Chancellor acknowledges that people still feel worse off

Jeremy Hunt has acknowledged that people would probably feel worse off than they did a few years ago.

The chancellor said “two huge shocks” – the Covid pandemic and Russia’s war in Ukraine – were responsible for the fall in living standards.

I spoke to ITV Good morning Great Britain program, the chancellor said: “Do people feel better off now than they did a few years ago? No, because we’ve had something that you and I have never had in our lives.

“We’ve had two huge economic shocks in quick succession, so no, they’re not feeling better than they were a few years ago.

“The figures show very clearly that living standards have improved over time since 2010, we have added four million more jobs and we have attracted more investment than anywhere else in the world, with the exception of China and the United States.

“The reason I say this is because this is an election year, people are going to make a choice about the future.

“When it comes to the important things that make a difference, the tough decisions about a flexible labor market, about cutting taxes so we attract investment from abroad, a Conservative government will continue to make those tough decisions.”

Watch part of the interview below:

Matt MathersMay 22, 2024 09:18

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Hunt avoids the question of whether he personally feels richer now that the cost of living is under pressure

Jeremy Hunt said it had “nothing to do with me” when asked if he personally felt richer following the cost of living crisis.

Asked by BBC Radio 4 Today program when he felt richer, the chancellor said: “It has nothing to do with me. It has to do with my responsibilities as chancellor.

‘What I know when I became chancellor is that the Office for Budget Responsibility said we were going to see the biggest drop in living standards ever.

‘The Bank of England said we would see the deepest and longest recession in a century.’

Pointing to the cost of living support that the government had offered, he added: “The result of those difficult decisions, and they were difficult because in the end we had to tax those decisions, but the result is that the standard of living has has fallen since Rishi Sunak became Prime Minister.”

In a testy exchange, Mr Hunt could earlier be heard urging “me too” as host Emma Barnett said she was interested in people’s household finances.

Jeremy Hunt (Aaron Chown/PA Wire)

Matt MathersMay 22, 2024 09:05

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Government loans are higher than expected in April, which is a blow to the chancellor

Chancellor Jeremy Hunt has been dealt a blow after official figures showed April borrowing exceeded forecasts to £20.5bn in the fourth highest April since records began in 1993.

The Office for National Statistics (ONS) estimated that net public sector debt was £1.5 billion higher than in 2023, partly driven up by falling national insurance contributions.

Matt MathersMay 22, 2024 8:57 AM

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The worst cost of living crisis is ‘not over yet’ – think tank

Many people are still facing lower living standards, a think tank has said, warning that the worst of the cost of living crisis is “not over yet”.

Ben Harrison, director of the Work Foundation at Lancaster University, said: “Workers across the country could be quietly relieved that their bills and groceries are rising at the lowest level since 2021.

“But even at 2.3 percent, inflation remains above the Bank of England’s target and many people will face lower living standards for some time to come.

“The truth is that the worst cost of living crisis in more than forty years is not over – most workers are still facing energy, food and housing costs that are much higher than they were three years ago .

“The sting in the tail is that interest rates remain at a 16-year high of 5.25 percent. And while there is no guarantee that the Bank of England will cut interest rates anytime soon, low-paid and insecure workers are particularly exposed to record increases in private rents and higher mortgage payments.”

File photo: Prices are still rising despite the decline in inflation (PA wire)

Matt MathersMay 22, 2024 8:46 AM

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