UK inflation falls to 2.3%, lowest level in nearly 3 years but still above Bank of England's target

A general view of the Bank of England in London, Thursday May 9, 2024. The Bank of England has kept its main U.K. interest rate at a 16-year high of 5.25% with several policymakers still worrying about some key inflation measures. In a statement Thursday, the banks nine-member Monetary Policy Committee voted 7-2 to keep rates unchanged, with the 2 dissenters backing a quarter-point reduction. – Inflation in the U.K.

Though the latest fall in inflation is welcome, it didn't drop as far as some economists had hoped. It also doesn't mean the cost of living crisis — the worst in around 40 years — is over. Lower inflation, after all, just shows that prices are rising more slowly than they were before. Over the past couple of years, goods and services have risen by 15%, with food prices up even more at around 25%.

Higher interest rates — which cool the economy by making it more expensive to borrow, thereby bearing down on spending — have contributed to bringing down inflation worldwide. Figures last week showed that the British economy has started growing again.

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