Bank of England must proceed with caution as households are still cutting back and business confidence is weak
There is hope for households across Britain that inflation, finally, has peaked. After hitting a 41-year high of more than 11% in October as energy bills soared, the fall in the annual inflation rate in December for a second consecutive month will come as a relief.
However, prices remain high and are still rising fast. Lower inflation rates do not mean prices are falling for consumers; it is just that they are not rising quite as fast as a month ago. The cost of living crisis may be fading but it is very far from over.
