The cost of living crisis has been an ongoing issue in the UK despite the inflation levels having reached close to normal now
Food inflation in the UK is now lower than it has been since 2021, as per new figures. The next UK government will benefit from the eased pressure on household finances. There has been a slowdown in inflation in grocery stores and gall in fuel prices. Although the costs continue to be expensive for most families in the UK.
The cost of living crisis has been an ongoing issue in the UK despite the inflation levels having reached close to normal now. People in the country have faced prices rising at rates not seen in decades while wages struggled to keep up.
People are in debt due to their inability to keep up with rising expenditures. A record 6.7 million people in the UK fell behind on their bills in the six months leading up to March 2024. Interest rates have also caused mortgage payments to rise. As a result, landlords raise rents. Many people face increased housing costs.
As per the figures from the British Retail Consortium (BRC) the inflation in the annual UK shop price dropped to 0.2% last month from the high of 0.6% in the month of May. Prices of many key products like coffee and butter have been cut down. This marks the slowest change since October 2021.
According to chief executive Helen Dickinson, during the peak of the cost of living crisis, significant investments were made by retailers in improving their operations and supply chains. This was done to compensate for the impact of global shocks on input costs. This effort is clearly paid off, with shop prices having risen by just 0.2% over the past 12 months. All the work done by the retailers to reduce their costs and prices will work in the favor of the winning party on Thursday’s election. Further easing the cost of millions of households.
The inflation prices of fresh food further slowed down to 1.5% from 2% in May. Non-food prices went deeper into deflation, at 1% cheaper from 0.8% in May. Retailers tried to increase sales by offering discounts.
Rishi Sunak is said to be credited for the fall in inflation which was at its peak of 11% in 2022 and it returned in May to the Bank of England’s target which was 2%. Although there are opinions that his party is most likely to lose in the general election held on Thursday.
The Bank of England is assessing whether the prices have eased enough for it to cut interest rates for the first time since 2020. However the inflation service sectors run at 6% and are unpredictable. Investors are putting a roughly 60% chance on the BoE cutting Bank Rate to 5.0% from 5.25% on Aug. 1.
According to RAC the average price of petrol in the UK at the end of June was below 145p a liter which was down by 148p. Diesel also dropped to 150p from 154p. The petrol prices in Northern Ireland is 4.5p a liter which is cheaper on an average and diesel is recorded to be 8p cheaper than the rest of the UK. Hence, the fuel prices are not close to where they should be despite the second fall in the consecutive month, said RAC.
The RAC’s head of policy, Simon Williams, said: “While it’s good news prices at the pumps have fallen for the second month in a row, this also leaves a bad taste in the mouth because we know drivers in Great Britain are continuing to get a raw deal as both petrol and diesel are still much more expensive than in Northern Ireland.” He also added that prices at forecourts that are owned and run by Shell and BP were said to be expensive.