Meanwhile, across the pond, in the UK, inflation remained flat in September at 3.8%. That 10.4% represents a slight recovery from last year’s high of 11.1% in the month of October (October 2022). This figure is consistent with the high inflation numbers in July and August. It has sparked energetic debate between politicians and economists alike over the impact on our economy and the current cost of living crisis. The new inflation figures from the Office for National Statistics (ONS) were published just this morning. It shows that inflation is still much lower than the previously expected likely 4% rise due to the central bank economists’ prediction for September.
Even though inflation numbers have stabilized, leaders in Washington and state capitals are still clamoring to do something about the current—and frankly, recent—economic conditions. Rachel Reeves, Shadow Chancellor of the Exchequer, stated, “I am not satisfied with these numbers. For too long, our economy has felt stuck, with people feeling like they are putting in more and getting less out.” Her remarks struck a chord with millions who are facing the brunt of skyrocketing living expenses combined with ever-increasing levels of wage stagnation.
Mel Stride, Chief Secretary to the Treasury, emphasized the challenges faced by households: “Inflation is pushing up the cost of living and punishing those Labour promised to protect.” Core inflation for food and non-alcoholic beverages is showing progress. It fell from 5.1% in August down to 4.5% in September. This rollback is a welcome bit of news as grocery costs are increasing at the slowest pace in more than 13 months.
Indeed, the inflation numbers over the last three months stand out. This took them to their joint-highest level since January 2024, of 4%. In late 2020, UK inflation was close to 0%, which serves as a reminder of how dramatically circumstances have changed over the past couple years. In January 2020, the rate was 1.8 percent. This figure paints a clear picture of how rising cost of living is exacerbating the impacts of the economic downturn.
Moving forward, millions of people dependent on supplemental income or Social Security payments can expect a 3.8% raise in their salaries next year. This proposed change would be a much-needed relief to the burden of long-standing inflation. This change is intended to provide some financial relief to those hit hardest by increasing expenses.
Grant Fitzner, Chief Economist at ONS, further analyzed the situation, stating, “The largest upward drivers came from petrol prices and airfares, where the fall in prices eased in comparison to last year.” He noted that these increases were offset by reduced prices for various recreational activities and cultural purchases, including live events.
The UK is entering a difficult economic situation. The new government officials and opposition leaders are making a concerted effort to stress the growing demand for inclusive economic growth that benefits working people. Reeves reiterated the need for policies that “support people struggling with higher bills and the cost of living challenges,” aiming for an economy that rewards hard work.
