Credit, Collections & Insolvency News
Hard-pressed households have had little to be encouraged by financially during 2023, but the end of the year has brought some more hopeful indications for the coming months. In the year to October 2023, the CPI (Consumer Prices Index) increased by 4.6%, down from 6.7% as September, meaning the government have achieved their target of bringing inflation below 5.4% by the year’s end. While this means prices are still rising, their rate of rise has slowed more than had been anticipated.
Over the 12 months to October 2023, several inflation rates remain high, with food and non-alcoholic beverages at 10.1%, alcoholic beverages and tobacco at 11.0% and communication at 8.1%. However, the lowest rate was for housing, water, electricity, gas and other fuels at -3.5%, meaning these prices are now actively falling after the unprecedented bill increases seen during 2022 and much of 2023.
In fact, in the year to October 2023, gas prices fell by 31.0% and electricity prices by 15.6%, the lowest annual energy inflation rates since records began in January 1989. Energy prices do still remain high though, with the price of gas in October 2023 around 60% higher than two years previous and electricity 40% higher. The size of the percentage increases and decreases only serves to illustrate the financial turbulence of the last few years.
Other positive news suggests a smaller-than-expected deficit, helped by higher tax receipts reflecting higher wages and inflation, with the government borrowing £98.3 billion in total across the first half of the financial year. That is £21.9 billion more than a year earlier but less than the March forecast of £115.2 billion. Public sector net debt in October 2023 (excluding NatWest and Bank of England) was £2,394.8 billion (88.6% of GDP). This was £243.2 billion more than in October 2022, an increase of £666 million per day, mainly due to benefits and government measures to help people during the cost of living crisis, such as the Energy Price Guarantee.
There has been little to nothing to cheer during 2023 as significant and increasing numbers of UK households have struggled to make ends meet. While this month’s figures only show a fairly modest slowing in just some of the soaring increases we have seen, the hope is that they point towards a trend which will start bringing relief to people’s budgets in the new year and beyond.
With that in mind, we look expectantly towards 2024 as a year where we will see more consistently positive news for the UK’s Financial Wellbeing. With our sessions continuing to engage many thousands of people of all ages with Financial Education and Financial Wellbeing, we’ll continue to play our vital role in seeing a healthier financial future for everyone.