The latest inflation figures are “in line with” government expectations, a Treasury minister has said.
Economic secretary to the Treasury Andrew Griffith told Sky News this morning that the government was “on track”, despite inflation holding steady at 6.7 per cent in September, according to the Office for National Statistics.
Rishi Sunak pledged in January to halve inflation by the end of the year.
Inflation was at 10.7 per cent in January, meaning to meet this pledge he has to lower price rises to 5.3 per cent in December.
“We always said it wouldn’t be easy and we’ve had to take responsible but tough choices,” Griffith said.
“But what today’s inflation figures show, is that we agree with most commentators out there that we’re on track to halve inflation this year.”
Analysts had predicted inflation would dip to 6.6 per cent for the month.
Asked how concerned the government is that the Bank of England may increase interest rates further, Griffith said this morning that ministers are doing “everything we can” to help the economy.
He said: “We’re always concerned about the impact on ordinary people and that’s the big challenge of interest rates.
“The bit that we can do is be responsible with our public finances, not make promises about spending or indeed tax cuts that can’t be financed.”
The inflation figure remained in September unchanged just as separate data from the ONS showed wages began to outpace price rises for the first time in the three months to July and to August.
Responding to the latest figures, Chancellor Jeremy Hunt, said: “As we have seen across other G7 countries, inflation rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year.
“Today’s news just shows this is even more important so we can ease the pressure on families and businesses.”
ONS chief economist Grant Fitzner said: “Food and non-alcoholic drinks prices eased again across a range of items with the cost of household appliances and airfares also falling this month.
“These were offset by rising prices for motor fuels and the cost of hotel stays.”
Meanwhile, Griffith declined to say whether the government would hike benefits in line with the September measure of inflation, which is typically used as the key measure.
He said that ministers could not “make promises about spending or indeed tax cuts that can’t be financed and would put more pressure on inflation and, of course, interest rates”.
He said the assessment process is “yet to happen”, adding: “Last year we increased benefits by 10pc to protect people, one of the largest ever increases.”
James Smith, Research Director at the Resolution Foundation, said: “Progress on falling inflation has stalled, for one month at least. It should fall sharply next month to below 5 per cent next, as energy prices fall for most people.
“The latest inflation data tells us about the recent past and also shapes cost-of-living pressures on low and middle income households next year, as it normally used to increase benefits in April.
“Should the government choose not to do this, as it has done seven times since 2010, in order to save money, nine million families across Britain will pay a heavy price.
“Families who receive benefits would see their incomes fall by £460 on average, while many low-income families with kids face much higher income losses, rising to £1,200 for a low income couple with two children.”