at 3.8% in the year to September,<\/a> inflation remains considerably above the Bank’s target and while that persists, consumers may remain jittery about spending, uneasy about the future path of prices. <\/p>\nAfter all, during the spike in inflation a couple of years back, they experienced the equivalent of more than a typical decade’s worth of price rises in just two years. <\/p>\n
They, and their finances, are scarred.<\/p>\n
And inflation in some areas such as services – think hotels and restaurants – remains stubborn. <\/p>\n
Sectors such as hospitality are most likely to have seen their wage bills rise substantially – analysts suggest by as much as 10% – due to government policies such as higher minimum wages and tax increases over the past year.<\/p>\n
But there are signs that things are settling down – food prices eased for the first time in months in September, as the impact of higher commodity prices fades a little. <\/p>\n
While food makes up a relatively small part of the basket of goods and services used to measure inflation, it is the most visible form of price rises. <\/p>\n
Meanwhile, economists feel that the impact of some of the other higher costs firms have been passing on may be peaking. Economists expect inflation to fall back towards the 2% target next year.<\/p>\n
And remember, on average wage rises are comfortably outpacing inflation, so the cost-of-living squeeze is easing for many, even if it may not feel like it. <\/p>\n
Plus, traditionally these figures are used to uprate many benefits for working age people – some may see an increase of about 6% in their universal credit payments next spring.<\/p>\n
Following the release of the latest inflation figures, Chancellor Rachel Reeves said she was not satisfied with progress so far in bearing down on price rises. <\/p>\n
She went on to hint at help to come in November’s Budget, with, we understand, some relief expected on energy bills. <\/p>\n
Businesses, however, remain cautious – some retailers are warning that further tax rises in the Budget may cause a resurgence in inflationary pressures. <\/p>\n
And until the Bank of England feels that inflation is firmly under control, it’s always going to be cautious about cutting interest rates. <\/p>\n
So while there’s still unlikely to be a cut in rates in November, analysts think there may be a growing chance of a “Santa cut” in December – just in time for Christmas. <\/p>\n","protected":false},"excerpt":{"rendered":"There’s relief for many today that inflation didn’t hit the feared 4% last month – relief for households,…\n","protected":false},"author":2,"featured_media":233088,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-233087","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/233087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=233087"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/233087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/233088"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=233087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=233087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=233087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}