Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

UK Inflation Drops at Fastest Pace in 50 Years

Fri 22 Mar 2024 | 07:10 PM
Taarek Refaat

The inflation rate in Britain decreased at its fastest rate in 50 years, reaching 3.4% last February, compared to 4% the previous month.

Expectations had indicated a decline of 3.5%, but the decline in inflation exceeded expectations and recorded its highest rate in five decades. This is also the first decline since last November after inflation rose unexpectedly in December and remained steady in January.

With this rate of inflation, the British economy has recorded the lowest level of inflation in two years, and this decline is the fastest decline in inflation within 12 months since 1978, according to a report published in the local newspaper “Evening Standard” published in London. 

The data issued by the Office of National Statistics was the last major release before a decision on interest rates due from the Bank of England, as the bank had set its goal of reducing inflation by 2%, which means that the bank is closer to achieving the desired goal, which may mean that Interest rates may also return to decline.

The central bank kept interest rates unchanged at 5.25% on Thursday for the fifth time in a row. However, the Monetary Policy Committee, which sets interest rates, said there were “encouraging signs” of lower inflation that could open the door to future interest rate cuts.

Last August, interest rates in Britain reached 5.25%, their highest level in 16 years.

The Bank of England has indicated that it expects interest rates to remain high for longer to ensure the fight against inflation is secured after energy costs rose after Russia's invasion of Ukraine sparked a cost-of-living crisis through double-digit inflation that peaked at 11% in October 2022.