However, leading economists are sceptical that the halving of inflation compared to last year has much to do with any government plan – or indeed is something within the government’s power.
Paul Johnson, director of the IFS, an influential economics think tank, said: “The job of cutting inflation is for the Bank of England not the government. So it was always inappropriate for the government to have a target/pledge to halve inflation.
Paul Johnson, director of the IFS, an influential economics think tank, said: “The job of cutting inflation is for the Bank of England not the government. So it was always inappropriate for the government to have a target/pledge to halve inflation.
The Office for National Statistics (ONS) points this morning to lower energy costs as the biggest factor pulling inflation down – a global, not a domestic factor. Economists have predicted for more than a year that the difference between prices now and prices a year ago would shrink once the big hikes in energy bills of October 2022 were more than a year in the past.
Since then, as predicted, wholesale gas prices have dropped sharply and gas costs are down 31% – the sharpest drop since 1989 – and electricity prices are down by 15.6%. That was the biggest downward pressure on this October’s inflation figure followed by food.
Those factors have little to do with domestic fiscal policy and much more to do with an easing of global inflationary pressures – as reflected in other countries, such as France, where the official measure of inflation is now 4.5% – or the US, where it’s 3.2%.
Bringing inflation down is officially the job not of the government but the Bank of England, which is expected to regulate inflation through monetary policy – meaning measures such as raising or cutting interest rates.
Paul Johnson, director of the IFS, an influential economics think tank, said: “The job of cutting inflation is for the Bank of England not the government. So it was always inappropriate for the government to have a target/pledge to halve inflation.
However, leading economists are sceptical that the halving of inflation compared to last year has much to do with any government plan – or indeed is something within the government’s power.
Paul Johnson, director of the IFS, an influential economics think tank, said: “The job of cutting inflation is for the Bank of England not the government. So it was always inappropriate for the government to have a target/pledge to halve inflation.
Paul Johnson, director of the IFS, an influential economics think tank, said: “The job of cutting inflation is for the Bank of England not the government. So it was always inappropriate for the government to have a target/pledge to halve inflation.
The Office for National Statistics (ONS) points this morning to lower energy costs as the biggest factor pulling inflation down – a global, not a domestic factor. Economists have predicted for more than a year that the difference between prices now and prices a year ago would shrink once the big hikes in energy bills of October 2022 were more than a year in the past.
Since then, as predicted, wholesale gas prices have dropped sharply and gas costs are down 31% – the sharpest drop since 1989 – and electricity prices are down by 15.6%. That was the biggest downward pressure on this October’s inflation figure followed by food.
Those factors have little to do with domestic fiscal policy and much more to do with an easing of global inflationary pressures – as reflected in other countries, such as France, where the official measure of inflation is now 4.5% – or the US, where it’s 3.2%.
Bringing inflation down is officially the job not of the government but the Bank of England, which is expected to regulate inflation through monetary policy – meaning measures such as raising or cutting interest rates.
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