UK inflation falls to 2.3% in April but Jeremy Hunt warns 'cost of living crisis not over'

22 May 2024, 07:05 | Updated: 22 May 2024, 08:33

The rate of UK inflation has fallen to the lowest rate in three years
The rate of UK inflation has fallen to the lowest rate in three years. Picture: Alamy

By Flaminia Luck and Kit Heren

UK inflation fell to the lowest level in nearly three years in April as energy prices continued to cool, but the Chancellor warned that the cost of living crisis was not over.

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Consumer Prices Index (CPI) inflation slowed to 2.3% in April, down from 3.2% in March, the Office for National Statistics (ONS) said on Wednesday morning.

It marks the lowest level since July 2021 when inflation was recorded at 2% - the Bank of England's target level.

Read more: Your morning news briefing, Wednesday May 22 2024: Inflation boost for Rishi, Royal Rift and Rain

Read more: Reeves accuses Sunak of gaslighting Britain on economy as research claims Inflation 'costs UK same as 1% tax hike'

Watch Again: Chancellor of the Exchequer speaks to LBC as the UK inflation rate falls

Asked if the cost of living crisis was over, Mr Hunt told LBC's Nick Ferrari: "I don’t think you can say that, because although it’s very encouraging news for people who are worried about cost of living pressures - I mean inflation is now lower than it is in the Eurozone, France, Italy - and that is encouraging... prices are still higher in absolute terms than they were a year ago, and so people still feel those pressures."

He added that it would be "encouraging for families" that on Tuesday "the International Monetary Fund confirmed that they think the UK economy will grow faster than any large economy or Japan over the next five, six years - and they think the outlook is good for the UK economy."

Mr Hunt said: "So I think we have turned a corner but I think it will take time for people [to] actually feel it.

In response to the latest inflation figures, a Treasury spokesperson said: "We rightly protected millions of jobs during Covid and paid half of people's energy bills after Putin's invasion of Ukraine sent bills skyrocketing - but it wouldn't be fair to leave future generations to pick up the tab.

"That's why we must stick to the plan to get debt falling. The economy is turning a corner, with strong growth this quarter and inflation close to target, allowing us to cut taxes for the average worker by £900 a year."

However, the latest inflation figures are not the time for ministers to be "taking a victory lap", according to Rachel Reeves.

In a statement released in response to the latest figures, the shadow chancellor said: "Inflation has fallen, but now is not the time for Conservative ministers to be popping champagne corks and taking a victory lap.

"After 14 years of Conservative chaos families are worse off. Prices in the shops have soared, mortgage bills have risen and taxes are at a 70-year high. Rishi Sunak is now putting family finances at risk again with his £46 billion unfunded policy to abolish national insurance that will mean higher borrowing, higher taxes or the end of the state pension as we know it.

"It's time for change. Labour's first steps will deliver economic stability so we can grow our economy and keep taxes, inflation and mortgages as low as possible."

Some commentators said the figures would not signal the end to the cost of living. Ben Harrison, Director of the Work Foundation at Lancaster University, said: “Workers across the country might be quietly relieved that their bills and shopping are rising at the lowest level since 2021.

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

Trades Union Congress (TUC) general secretary Paul Nowak said: "The cost-of-living crisis is not over - no matter how much ministers pretend it is. Prices are still going up. Food and energy bills are much higher than a couple of years ago. And many are being hit by soaring mortgage repayments."

He continued: "That's because household budgets have been decimated by the highest price rises in the G7 and wages have flatlined over the last 14 years.

"Pay packets are still worth less today than in 2008, with working people on course to end this Parliament poorer than at the start. Make no mistake - the Tories have delivered the worst period for living standards in generations."

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