In August, inflation decreased for the first time in a year as lower diesel and gasoline prices helped relieve some of the strain on struggling households, although it is still very close to its 40-year record. Consumer Price Index inflation fell from 10.1 percent in July to 9.9 percent in the year to August, according to the Office for National Statistics (ONS). Experts had predicted that the number would not change between the two months.
The fuel price decline of 6.8% was the largest since the early stages of the pandemic in 2020 when oil prices briefly fell below zero in several markets.
According to the ONS, the decrease in the price of motor fuel in the index’s transportation component was the primary factor in the annual inflation rate’s lowering in August 2022. Food and non-alcoholic beverages, other goods and services, apparel, and footwear all saw price increases that had smaller, partially offsetting upward effects.
The senior economist at the accounting firm Mazars, George Lagarias, cautioned that it will take some time before inflation genuinely starts to decline. It will take months of lower oil prices before end-user prices may noticeably decrease once more. Until at least the end of the year, inflation may prove to be a major issue, he warned. However, input costs have started to decline, and this should eventually be reflected in general fuel prices. The figures reflect a positive trend for the first time in more than a year. The official statistics show that since September 2021, inflation has increased every month.
However, despite a promising overall trend, the Resolution Foundation’s review of the data reveals more worrisome specifics. According to the think tank, the lowest 10th of households are experiencing an average inflation rate of10.6%, compared to the richest households’ average inflation rate of 9%.
Households across the nation are under pressure from inflation as a result of skyrocketing living expenses, mostly brought on by high energy prices. The energy crisis has affected every aspect of the economy, driving increasing the cost of food and other goods. The government’s last-week announcement of support for energy bills, in the opinion of experts, will prevent inflation from rising to the unsettling levels predicted.