Rishi Sunak is celebrating UK’s inflation fall – there’s just several problems

Rishi Sunak’s been sharing inflation graphs again. New inflation figures released today show price rises have slowed to 3.2% for March 2024, its lowest level since 2021.

But he’s been accused of ‘breathtaking complacency’ as prices remain high and families struggle with insecurity.

The CPIH index – regarded as the most comprehensive measure of inflation – shows how much prices have risen, with the index going from 124.3 to 131.6 in the period Sunak highlights. In other words, a mythical ‘average good’ costing £124.30 in October 2022 would cost £131.60 in March 2024. Look back further, to October 2021, and it would cost just £113.40.

“Assuming that lower inflation means the cost of living crisis is ending is the kind of breathtaking complacency that voters will punish at the ballot box in the local elections next month,” said Megan Davies from the Stop the Squeeze campaign.

“We know that in the real world, the cost of essentials is still unbearably high, incomes have barely moved in real terms for years and families are looking to the future with a deep feeling of insecurity. “

The fall is also less than had been expected by economists, who had predicted inflation falling to 3.1%. The Bank of England is aiming to reduce inflation to 2%.

This slower-than-expected fall has also cooled expectations of a cut to interest rates, with the FT reporting markets now expect the Bank of England to begin reducing the base rate from September or November.

A reduction in inflation is good news, said Pranesh Narayanan, research fellow at IPPR, but other indicators give a hint of the economy’s true state.

“Inflation is coming down, but unemployment is ticking up. We still have record levels of people who are too sick to work, a cost-of-living crisis and stagnant growth,” said Narayanan.

“It’s time for the Bank of England to cut interest rates and the government to come up with a serious plan for public spending and investment. The priority should not be more tax cuts.” 

Today’s figures are not the first time Sunak has shared a similar graph. Last month, he said a lower inflation figure was “good news for you, your family and the country.”