{"id":25785,"date":"2024-02-07T15:13:16","date_gmt":"2024-02-07T15:13:16","guid":{"rendered":"https:\/\/smh.group\/?p=25785"},"modified":"2024-02-07T15:13:16","modified_gmt":"2024-02-07T15:13:16","slug":"rapid-decline-in-inflation-in-2023","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/rapid-decline-in-inflation-in-2023\/","title":{"rendered":"Rapid decline in inflation in 2023"},"content":{"rendered":"<p><strong>In early 2023, the Prime Minister made a commitment to cut inflation by half. This objective was achieved, but the question remains: how much of this success can be attributed to him?<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-25810 aligncenter\" src=\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2024\/02\/inflation-chart-300x262.jpg\" alt=\"\" width=\"421\" height=\"367\" srcset=\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2024\/02\/inflation-chart-300x262.jpg 300w, https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2024\/02\/inflation-chart-1024x894.jpg 1024w, https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2024\/02\/inflation-chart-768x670.jpg 768w, https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2024\/02\/inflation-chart-1536x1341.jpg 1536w, https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2024\/02\/inflation-chart-2048x1788.jpg 2048w, https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2024\/02\/inflation-chart.jpg 1980w\" sizes=\"auto, (max-width: 421px) 100vw, 421px\" \/><\/p>\n<p>Inflation across 2023, as measured by the Consumer Prices Index (CPI) ended at 4.0%, a far cry from the 10.5% of 2022 and the October 2021 peak of 11.1%. The drop had been widely predicted, although in the final month of the year there was a small surprise: the rate rose 0.1% whereas the pundits had forecast a fall of the same amount.<\/p>\n<p>The rapid decline in inflation \u2013 disinflation to use economists\u2019 jargon \u2013 does not mean prices have generally fallen (deflation), although there were a few exceptions such as in electricity and gas prices. The absence of widespread price falls is one reason why the cost-of-living remains a live issue for politicians for the forthcoming general election.<\/p>\n<p>The story behind the CPI\u2019s fall in 2023 should give those same politicians something to consider before claims are made to conquer inflation:<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>For example, the main driver of double-digit inflation in 2022 was energy prices. That meant higher fuel prices for all forms of transport \u2013 air fares rose by over 44% in 2022. It also pushed up domestic gas and electricity prices, by 128.9% and 65.4% respectively.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>In 2023, the opposite was true as energy prices declined: air fares rose by just 0.8% while gas prices tumbled by 31% and electricity by 15.4%. Those reversals were a major part of the overall decline in inflation. Energy prices are set globally beyond the influence of UK politicians.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>It was a similar story with the rising prices of food. In 2022, food prices rose by 16.8% whereas a year later the annual increase was 8.0%. However, that was still double the overall inflation rate and left average food prices more than 26% up over the two years. On the fringes of food, there was an example where the government does have limited control over prices \u2013 alcoholic drinks. Here, the 2023 price rise was 9.6%, against 3.5% in 2022, in large part because of increases to alcohol duty.<\/p>\n<p>The good news for 2024 is that inflation is expected to continue falling, with the consensus forecast for the final quarter of the year being just under 2.5%. However, it remains important to review the impact of past inflation on your financial planning: prices are up 21.8% since the end of 2019.<\/p>\n<p>To discuss your financial planning, contact our\u00a0<a href=\"https:\/\/devstagesite.co.uk\/smhgroup\/financial-services\/\"><strong>Sheffield based Financial Advisers<\/strong><\/a>\u00a0on\u00a0<strong>0114 266 4432<\/strong>\u00a0or\u00a0<a href=\"mailto:info@smh.group\"><strong>info@smh.group<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In early 2023, the Prime Minister made a commitment to cut inflation by half. This objective was achieved, but the question remains: how much of this success can be attributed to him?<\/p>\n","protected":false},"author":4,"featured_media":25787,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[16],"tags":[1204,1225,1228,1230,1226,1227,1229],"class_list":["post-25785","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-services","tag-economictrends","tag-disinflation2023","tag-economicindicators","tag-financialforecast","tag-inflationoutlook","tag-monetarypolicy","tag-pricestability"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Rapid decline in inflation in 2023 - SMH Group<\/title>\n<meta name=\"description\" content=\"Inflation across 2023, as measured by the CPI ended at 4.0%, a far cry from the 10.5% of 2022 and the October 2021 peak of 11.1%.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rapid decline in inflation in 2023 - 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