UK inflation falls to 6.8% – is the UK heading for stagflation?
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UK headline inflation has dropped to 6.8%, but will wage growth slow down the fall in prices?
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16 August 2023
Inflation may look like it’s hurtling down a hill but it risks being snagged on the way by the surprise rise in wage growth.
The fall to 6.8% in the 12 months to July, from 7.9% in June, will be met with a sigh of relief during the cost-of-living crisis.
Learn more about inflation
Energy bills are lower, and price rises are slowing at supermarkets. Unemployment is up from 4% in May to 4.2% in June, showing signs that the blast of cold air from higher interest rates might be dampening the labour market. Companies are showing signs of becoming more cautious about hiring workers with new staff appointments declining in July.
However, underlying price rises are still uncomfortably stubborn. If you strip out volatile food and fuel costs, there hasn’t been a slowdown. So-called core CPI (Consumer
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