UK inflation ‘eases slightly’ to 10.7%; but Hunt warns ‘wrong choices’ would prolong the pain – business live

Inflation falls back from 41-year high as motor fuels price rises slow, but costs rise faster in restaurants, hotels, cafes and pubs.

• UK inflation eases to 10.7% as annual rate of price increases slows

UK households face a steep fall in living standards due to high inflation, warns Andrew Tully, technical director at insurance company Canada Life:

Tully explains:

“While the headline numbers grab the news, the reality is underlying personal inflation rates for the things we buy every week, like food and energy, are running way above these headline figures, and our wages and pensions are simply not keeping up.

“We are heading into a period where our living standards are predicted to fall by the largest amount since records began, and today’s inflation numbers will offer little comfort. As an example of the price pressures we face, four pints of milk cost £1.17 in September 2021 but that had increased rapidly to £1.52 by Sept 22. However, even as inflation slows, the price of that milk is likely to stay high, with the price simply not rising as fast as previously. The official economic forecasts are predicting a deep and protracted fall in living standards while we wait for our incomes to catch up.

“November’s slowdown could be the start of a painful deceleration in inflation as slowing demand, rising interest rates and falling commodity prices weaken the headline rate, but at the cost of a protracted recession and notably higher unemployment.

“With inflationary pressures looking more broad-based, the pace of easing is likely to be slow, which implies that wage growth will continue to trail inflation for some time, providing little respite to financially-squeezed households.

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