The rate of UK inflation fell to 2.3% in the year to April, according to the Office for National Statistics (ONS).
Inflation is down from 3.2% in March and is the lowest level since September 2021.
However, it is still above the Bank of England’s 2% target. The drop was driven by falling gas and electricity prices after the energy price cap was lowered by Ofgem.
The drop in inflation followed news that the UK economy grew by 0.6% between January and March, according to the ONS.
It means that the country officially emerged from recession with growth led by the services sector.
Despite the improving outlook, the Bank of England held interest rates at 5.25% for the sixth month in a row.
The British Chambers of Commerce (BCC) said the fall in the rate of inflation was positive news that increased the likelihood of an interest rate cut in the coming months.
David Bharier, Head of Research at the BCC, added:
‘Uncertainty will persist with global conflicts and trade wars threatening supply chains. Real wage costs also continue to grow – our most recent business survey found almost half of firms expect their prices to rise over the next three months, with labour costs cited as the main driver.
‘While the outlook may have brightened, the skies aren’t yet fully clear. UK firms need to see a long-term vision for the UK economy from politicians, including action on making trade easier, especially with the EU.’
Internet link: ONS website ONS website Bank of England website BCC website
