Inflation falls to 2.3%

The ONS has released new inflation figures today, 22nd May, showing that the rate of inflation has fallen to 2.3 per cent, down from its peak of 11.1 per cent.

• High Inflation around the world has made life tough for families over the past couple of years which is why we have made tackling it our number one priority. 

• Today is a major moment for the economy as not only have we more than halved inflation, but the rate of inflation is back to normal levels and its lowest point since 2021. We know there is more to do, but with rate of inflation down at 2.3 per cent from its peak of 11.1 per cent in 2022, this is more proof our plan is working.

• We have to stick with the plan under Rishi Sunak and the Conservatives: inflation back to normal, economy growing joint fastest in the G7, wages rising, taxes cut and triple lock protected. There is more to do. But we cannot let Labour take the country back to square one, with their £2,094 tax raid on working households, broken pledges on pensions and the risk of sweeping tax rises.  

Key facts:

• The rate of inflation is 2.3 per cent, easing the cost of living for families. The rate of inflation recorded in April 2024 stood at 2.3 per cent, down from 3.2 per cent in March and 11.1 per cent at its peak. A lower rate of inflation means family’s money goes further each month. 
• The UK rate of inflation is lower than France, Germany, the EU and the US. Inflation is now 2.3 per cent, lower than France, Germany, the EU and the US – showing the UK has stuck to the plan to successfully drive down inflation.
• The IMF has said inflation in the UK is falling faster than expected. The IMF state the UK is ‘approaching a soft landing’, with inflation falling faster than expected, and growth in Q1 2024 stronger than expected. They have upgraded their growth forecast for 2024.

That is why the Conservatives are helping families with the cost of living by:

• Taking the difficult long-term decisions on the economy. We took the difficult decisions to control public spending when inflation was at its peak – this included resisting pressure to fund above-inflation public sector pay settlements, despite Labour pushing us to do so (OBR, Economic and fiscal outlook – March 2024, 6 March 2024).
• Cutting the double tax on work for 29 million working people this year, worth £900 a year for the average worker, rewarding hard work across the country. Because we stuck to the plan and more than halved inflation, we have delivered a double tax cut to National Insurance for 29 million people, our tax cuts put £900 back in the pockets of the average worker on £35,400 a year and £650 back in the pockets of a typical self-employed person on £28,000 a year (HM Treasury, Spring Budget 2024, 6 March 2024).  
• Introducing and raising the National Living Wage (NLW) by £1,800 a year, ending low pay and ensuring that work always pays more than benefits. Our National Living Wage (NLW) introduced the first minimum wage target of 60 per cent of median earnings by October 2020. Since 1 April 2024, the NLW has risen by 9.8 per cent to £11.44, a record two thirds of median earnings, benefitting 2.7 million workers by an average £1,800 a year (HM Treasury, Autumn Statement 2023, 22 November 2023).
• Rolling out the biggest expansion of free childcare a £6,900 package for families, removing barriers to the workplace. We are delivering the largest ever investment into childcare, including increasing Universal Credit childcare payments by almost 50 per cent and providing more upfront financial support for low-income parents when they enter work or increase their hours, making it easier for parents to return and stay in work (DWP, Press Release, 28 June 2023). 
• Protecting the Triple Lock and uprating the State Pension by £900 from April 2024, protecting pensioners’ incomes. We have protected the Triple Lock we introduced in 2011 and uprated the State Pension by 8.5 per cent this April in line with average earnings growth, meaning pensioners are receiving up to £900 more a year (HM Treasury, Autumn Statement 2023, 22 November 2023). 
• Holding down energy prices for families and businesses. The Government’s Energy Price Guarantee held down inflation by 2.6 percentage points, whilst the Energy Bill Relief Scheme (EBRS) lowered headline inflation and the separate Energy Price Cap had a significant impact on reducing inflation following the peak of energy prices (OBR, Economic and Fiscal outlook – 15 March 2023).
• Freezing fuel duty for the fourteenth consecutive year, saving families over £1,000 since 2010. Since 2010, we have frozen fuel duty for fourteen consecutive years and maintained the five pence cut for an extra year. The support is available for much longer than has been the case in many countries and represents around £13 billion over three years and £250 for the average car driver (HM Treasury, Spring Budget Speech 2024, 6 March 2024).
• Freezing alcohol duty, helping to hold down inflation. The OBR states: ‘We expect this Budget’s measures to reduce CPI inflation by 0.2 percentage points in 2024-25, almost entirely reflecting the effect of maintaining the 5p cut to fuel duty for one more year and freezing alcohol duty’ OBR, Economic and fiscal outlook – March 2024, 6 March 2024).
• Setting out our plan to overhaul the benefits system, ensuring people who are fit to work are not left behind on benefits. We have set out our plan for welfare to tackle the rise in economic inactivity and ensure our benefits system is better targeted at those who need it most, including by reforming how we assess someone’s capability to work, improving the fit note system to stop people being written off as not fit for work by default, and reviewing our disability benefit system to ensure that our support is fairly and accurately targeted at those who need it most (PMO, Press Release, 19 April 2024).