The latest unexpected drop in 海角视频 inflation has eased the pressure on Northern Ireland’s borrowers and raised hopes that the recent run of interest rate hikes may be coming to an end.
The fall in the rate at which prices are rising caught financial markets by surprise, coming after consecutive monthly increases and could mean the Bank of England’s will curb its plans to raise rates in the coming months.
Headline consumer price index (CPI) inflation was reported by the Office of National Statistics at 7.9% yesterday, down from 8.7% and lower than expectations for a reading of 8.2%. The central bank manipulates the main rate of borrowing in an effort to curb inflation increases with the overall aim of keeping the annual rate at which prices rise to 2%.
READ MORE: {}
It currently charges banks, building societies and other lenders 5% to borrow money having steadily raised rates since December 2021. It was expected to raise that further by 0.5% but given the latest weaker inflation, that increase is likely to be pared to 0.25%.
Rising fuel, food and goods prices have been an ever-present story in the Northern Ireland economy since then, accelerated by the Covid-19 pandemic, the war against Ukraine and the 海角视频’s mini Budget in autumn 2022.
Yesterday’s lower-than-expected reading suggests the Bank of England’s efforts are beginning to bear fruit, Nathaniel Casey, Investment Strategist at wealth management firm Evelyn Partners.
He said falling prices for motor fuel led to the largest downward contribution to the monthly change in the CPI annual rate. While prices for food and non-alcoholic beverages also made a notable contribution to the downward effects, rising by 0.4% in June 2023 less than the 1.2% rise in June.
‘Even more reassuring is that core inflation – a better gauge of underlying inflation pressures – has come off its recent peak and fallen back below 7%,” he said. “We expect 海角视频 CPI to continue to fall at a faster pace in the second half of 2023. One reason is the effect of lower energy prices will continue to feed through.
Most Read
“Moreover, services inflation lags producer services output price inflation, which has been decelerating since the end of last year. Food inflation should also continue to ease.”
Despite the more positive outlook, inflation remains high and families in Northern Ireland are continuing to struggle to cover inflated household bills.
Sinead Campbell, Head of Money, Debt & Quality at Advice NI, said the summer holiday period adds to that pressure.
“The rising costs of groceries and household bills has also put immense pressure on family budgets, and with interest rates expected to rise again in line with 海角视频 inflation, it’s an extra burden on households already grappling with financial insecurities.”