Inflation falls to 2.5% in boost for Reeves’s plans
Share:
In November, the Consumer Prices Index (CPI) came in at 2.6 per cent, where petrol, train travel, and live entertainment pushed up prices. Inflation fell to 2.5 per cent in December, in a boost for chancellor Rachel Reeves. The figure is still above the Bank of England’s 2 per cent target, which means that the central bank is less likely to want to rapidly bring down interest rates, meaning higher costs for borrowers but better rates for savers.
Analysts expect that rising oil prices could start to feed into inflation figures. Higher petrol and diesel costs feed into most other prices as any goods requiring transport or processing will require costlier energy. Brent crude oil has risen 10 per cent in the last month to more than $80 a barrel.
Increases to the National Living Wage which kick in April could also push up prices as shops and factories pay more for wages and have to recoup their costs. The new rate will be £12.21 for workers aged 21 or more. ChancellorRachel Reeves has come under pressure over her plans for the nation’s finances, with rising yields on government bonds seen as an indicator of weaker market confidence in the economy.
