RISHI SUNAK insisted his plan was working as inflation dropped to its lowest level since March 2022.
The Office for National Statistics said Consumer Prices Index inflation fell to 7.9 per cent in June from 8.7 per cent in May.
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It surpassed City forecasts of a fall to 8.2 per cent.
But while the news was a welcome relief to No10, experts warned there were still mortgage rises to come and interest rates would not fall until late next year.
The PM said: “I know things are difficult for people right now but I’m determined to bring inflation down, today’s figures should give people some comfort that the plan is working. I’m going to stick to the course.”
The ONS said falling prices of motor fuel was the biggest contributing factor to the drop.
And while food prices did rise in June, they increased by less than they did at the same time last year.
Chancellor Jeremy Hunt urged supermarkets to pass on lower production costs by cutting prices. He said: “We want to make sure that supermarkets and other retailers are passing those on to families as quickly as possible, because people are feeling a lot of pressure.”
Energy Secretary Grant Shapps said inflation remains “far too high” but is at least “moving in the right direction”.
The Resolution Foundation think-tank said the “very welcome” decrease should ease pressure on both mortgages and pay packets.
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But bankers Nomura warned:“We maintain our view for three more 25 base point hikes at the Bank of England’s August, September and November meetings this year, and do not see rate cuts until the very end of 2024.”
This post first appeared on thesun.co.uk
