Inflation falls to 4.6%: Personal finance experts comment

• New data shows a sharp fall in UK inflation in the year to October, down to 4.6%
• It’s the lowest rate since November 2021 – the fall is mainly down to lower energy prices
• Gas costs were down by 31% in October, compared to a year earlier, while electricity was down 15.6%
• The government has pledged to halve inflation this year, from 10.7% at the end of 2022
• Rishi Sunak says it’s “welcome news” – but repeats the long-term target to get inflation down to 2%
• Labour says the government shouldn’t be “popping champagne corks”, as many Britons are still struggling from price rises
• Core inflation – which strips out energy – also fell, from 6.1% to 5.7%

Following the release of the latest inflation rate figure, which has dropped to 4.6%, here are some  personal finance experts reacting to the news.

Andy Mielczarek, Founder and CEO of SmartSave, a Chetwood Financial company, said: “Any drop in the rate of inflation is welcome news, and many Britons might be feeling a sense of relief that the worst of the cost-of-living crisis could finally be behind us. 
 
“As consumers feel the pinch on their budgets loosen, they should take advantage of the opportunity to consider revamping their savings strategy. In particular, those holding significant sums in easy-access high-street savings accounts, many of which continue to offer paltry rates, could end up missing out on better returns in the months to come. 
 
“The onus is on savers to search carefully for the right product and provider. For instance, as inflation continues to fall, those feeling more confident about setting money aside in a fixed-term savings account are likely to achieve better returns than those in easy-access or current accounts. And looking beyond the high street remains crucial when shopping around for the most competitive rates.” 

Lily Megson, Policy Director at My Pension Expert, said: “While Rishi Sunak may pat himself on the back for nearing his target of halving inflation to 5%, the reality is that households continue to grapple with serious economic challenges. Ultimately, the cost of living is still rising, which throws into question how people are able to spend, save and invest their hard-earned money. 
  
“There’s a pressing need for more robust support for those approaching or in retirement. If not, we will continue to see the worrying trend of people in their 50s, 60s and 70s either delaying their retirement, or unretiring to top up their pension pots. 
  
“We have to hope that next week’s Autumn Statement provides clear, decisive actions to address the financial concerns of pension planners across the UK, and improving access to regulated, affordable advice must be central to this. Knowledge is power, and providing better access to advice will empower consumers to navigate the economic landscape far more effectively.”

Mohsin Rashid, CEO of ZIPZERO, said: “A notable fall in inflation, and particularly energy prices, is great news. But as another unavoidable expense, rising food prices remains a major concern. Something must be done. 
  
“It would be nothing short of a miracle if predictions that food price inflation will be mostly gone by Easter are realised. And even if this comes to pass, that still leaves six months in which millions of households will continue to afford their weekly shop, entirely dependent on tight budgeting, shopping for deals, and squeezing every penny they can from promotions and rewards. 
  
“Supermarkets have made some progress in pushing special offers to their loyalty card members, but their profit margins show there is still far, far more they could be doing. I urge them to do everything in their power to make life easier for households and ensure that today’s encouraging inflation news is the first step on the path to recovery.” 

 Jatin Ondhia, CEO of Shojin, said: “November is shaping up to be a significant month, with inflation falling, a new-look cabinet, and an incoming Autumn Statement — this is a pivotal moment for people to reassess how they are managing their finance and consider how to best supercharge their savings and investments. 

“Even as inflation falls, investors cannot afford to be passive; in this environment, it is important to scrutinise your portfolio and explore every available option, considering both traditional and alternative assets. 
  
“The political and economic landscape has shifted once again this past month, and investors’ risk tolerance and long-term financial goals may need to recalibrate too. What’s more, all eyes will now turn to Jeremy Hunt and next week’s Autumn Statement. Falling inflation is a boost to the Chancellor, and it will be intriguing to see what he pulls out the famous red briefcase in the way of impactful policies aimed at fostering growth and galvanising the investment landscape – investors will certainly need to take note.” 

“It is only a matter of time before many banks start to drop their interest rates on their savings products. Savers should consider locking in higher interest rates for the long-term before they fall.” 

“While falling inflation is of course positive for the UK economy, it increases the speed of already-falling interest rates offered by the banks, and that has an impact on consumers and their money.” 

“It is therefore vitally important for savers to shop around to ensure their money is working as hard as possible by accessing savings accounts with the highest interest rates.” 

“Now is the time for savers to protect their savings. There are a host of great high interest options out there if savers look beyond the big names. For example, £25,500 saved into a 5-year fixed rate at 6% earns £8,217.84 in compound interest over the five years – a 32% rate of return.”