UK inflation falls as economy shrinks in May

4th August 2023 | News

The UK’s rate of inflation fell to 7.9% in the year to June while the country’s economy shrank in May, according to the latest Consumer Prices Index (CPI) published by the Office for National Statistics (ONS).

The inflation rate is currently at its lowest annual rate since March 2022, the ONS said.

Price rises have slowed by more than experts anticipated. According to the ONS, falling fuel prices helped the rate of inflation to drop, and food prices rose less quickly when compared to June 2022.

Core inflation also fell from 7.1% to 6.9%, the data showed.

Meanwhile, the UK economy contracted by 0.1% in May following growth of 0.2% in April, ONS data showed.

The rising cost of living and higher interest rates have been squeezing households and businesses, the ONS said.

It said the manufacturing, energy and construction sectors fell in May, along with sales at pubs and bars.

David Bharier, Head of Research at the British Chambers of Commerce (BCC), said the figures provide ‘further evidence of the precarious state of the UK economy’.

He added:

‘While businesses have been incredibly resilient in stomaching multiple waves of economic crises, our latest Quarterly Economic Survey shows that most firms are still not reporting improved business conditions.

‘Positively, slightly fewer businesses report inflationary pressures, but interest rates have grown as a concern for businesses. We are starting to see more businesses report rising borrowing costs, but we are yet to understand the full impact of rising interest rates.

‘Businesses are operating in a climate with a high degree of uncertainty, and government and Bank of England policy both need to be very responsive to developments.’

Internet links: ONS June inflation data ONS May GDP data BCC website

Williamson & Croft is a market leading accountancy, advisory and tax firm with particular specialisms in property, construction, retail, digital and creative, technology and professional services.

Global Association

News

Land Remediation Relief: How we can help accountants and their clients

Clients look for more than accounting services from their trusted accountants. Timely advice, recommendations, wider service offerings, or access to a network of trusted specialists can make a significant difference to your business and improve your professional...

The Register of Overseas Entities: It’s time to update

As of 1 August 2022, the Register of Overseas Entities (ROE) has been operational under the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA) for over a year. This initiative aims to combat global economic crime by enhancing transparency regarding the...

© 2023 Williamson & Croft