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Sunak hails ‘big moment for economy’ as inflation drops to 2.3%

UK inflation has fallen to 2.3 per cent, applying pressure on the Bank of England to cut interest rates.

Much of the drop — from a peak of 11.1 per cent a year and a half ago — is due to the energy price cap and slowing food price rises.

Bank of England Governor Andrew Bailey has said a first rate cut could come as soon as next month, but inflation did not fall to the lows of 2% as many economists expected, which could delay a cut in interest rates.

The Bank of England will also take into account the UK’s low unemployment rate and wages rising faster than expected, which could also lead to the Bank delaying the cut in interest rates.

However, Rishi Sunak has hailed today’s figures as a “major moment for the economy”, with the prime minister hoping it offers the Conservatives an electoral lifeline before an election later this year.

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