Inflation falls to 2%

Inflation has fallen to 2%, hitting the Bank of England target for the first time since Russia's illegal invasion of Ukraine sent prices in general and energy prices in particular soaring.

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Inflation has returned to the Bank of England’s 2.0 per cent target.

The rate of increase of prices is now less than a fifth of what it was when Rishi Sunak became Prime Minister

We cannot be complacent about this. Prices are still high, and although the prices of some specific items have gone down, the average level of prices is rising at a lower rate rather than falling. And inflation in Britain is now lower than in most of our main competitors.

Inflation is also down to a level low enough that it is realistic for most people's wages and pensions to keep up with it and grow faster than inflation so that their real income can grow and they can become better off.

The global pandemic and the impact of the war in Ukraine have clobbered almost everyone's standard of living over the past few years: this fall in inflation to target levels is one of the first essential building blocks for people's standard of living to start improving again, as is now starting to happen.

There is more work to do,  but Britain's economy is turning the corner.

Because the Conservative government has stuck to a clear plan,  inflation is back at the Bank of England’s 2.0 per cent target, the lowest point since July 2021, down from its peak of 11.1 per cent in October 2022. That means we can afford to cut taxes to put more money in people’s pockets. 

When inflation was running high – Labour refused to back the difficult decisions we took on public spending and what’s worse they were pledging to borrow £28 billion a year. Now, Labour’s £38.5 billion blackhole will take us back to square one and mean at least £2,094 of higher council tax and other taxes for hardworking families. 

Key facts:

• The rate of inflation is 2.0 per cent, the lowest point since July 2021, sticking to the plan to ease the cost of living for families. 

• The rate of inflation recorded in May 2024 stood at 2.0 per cent, down from 2.3 per cent in April and 11.1 per cent at its peak. A lower rate of inflation means families money goes further each month than it would if prices were still rising at a higher rate. 

• The UK rate of inflation is at the Bank of England’s target and is the second lowest in the G7. Inflation is now 2.0 per cent, lower than the France, Germany and the United States.