Headline inflation rates have declined, but policymakers are closely watching other measures that signal how deeply inflation has become embedded in the British economy. In June, some of these price pressures eased: Inflation in the services sector slowed slightly to 7.2 percent, and core inflation declined for the first time since January. “Fundamentally, wage growth and services inflation are too high.”High prices have eaten away at household budgets for a year and a half. In January, the government pledged to halve the inflation rate by the end of this year, which would mean a fall to 5.2 percent. In recent months, inflation readings had been surprisingly high, and the Bank of England has stepped up its warnings that inflation is stickier than officials expected.

Source: The Times July 19, 2023 23:36 UTC