The Office for National Statistics (ONS) have reported that their measure for inflation (Consumer Prices Index) fell to 1.7% for September. This is an unexpected reduction and is the lowest inflation has been in more than three years.
Drops in airfares and petrol were the main reasons for the reduction. The Bank of England targets 2% inflation, so this reduction may allow them to cut interest rates further when they meet in November. There is also some expectation that there could now be a second rate cut in December.
The September inflation figure is an important one since it’s normally used to set how much many benefits increase next April. These include Universal Credit, disability benefits, and carer’s allowance. Lower inflation may lead to lower increases in these allowances.
The drop in inflation may be temporary though, as energy prices increased in October, which may swing the picture once again.
See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest
The latest Budget was packed with policy announcements, but according to the Office for Budget Responsibility (OBR), these policies will not really change the UK’s growth outlook over the next five years.
The Government has announced a £725 million package of reforms aimed at increasing apprenticeship and training opportunities for young people. While much of the announcement centres on tackling youth unemployment, there could be benefits for small and medium-sized businesses.