CPI inflation falls to 7.9%

CPI inflation falls to 7.9%

19 Jul 2023

Price rises for June in isolation were in line with the BoE target which represents a substantial reduction of price increases seen more recently and a very positive sign that things are getting back on track.

This announcement is better than many economists had predicted and reduces the pressure on the Monetary Policy Committee to continue the expected path of increasing interest rates in the coming months, although rises are still expected.

Simeon Willis, XPS Pensions Group Chief Investment Officer, commented: “Today’s encouraging figures show that we are finally making ground in the fight against inflation. Whilst the 12-month number is still too high, what's encouraging is that the price increases over June in isolation have slowed considerably. If this trend continues, we could see the 12-month figure come down to target by Spring next year.

Whilst 12 month inflation at current levels remains damaging for any pensioners with non-inflation linked benefits, this announcement represents welcome news and means than the impact on the real value of a retiree’s pension is less than it might otherwise have been.”