Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to maintain consistency in the recent downward trajectory of inflation.

Although recent data shows inflation has halved since it’s peak in October 2022, it remains the biggest challenge to the economy. There are three key things the government is doing to further reduce inflation:

• Remaining steadfast in our support for the Monetary Policy Committee of the Bank of England as it takes action to return inflation sustainably to the 2% target.
• Taking difficult, but responsible fiscal decisions by resisting calls for reckless spending that would make inflation worse, reducing borrowing and introducing ambitious measures to support growth. This includes ambitious measures to help people get back into work, investing in clean, home-grown energy, and encouraging banks to pass on higher savings rates.
• Boosting labour supply, as labour market conditions are a key problem affecting UK businesses’ growth, as well as a significant driver of domestic inflation. Together, the packages at Autumn Statement and Spring Budget 2023 were the two largest increases to labour supply and potential GDP resulting from policy the OBR has ever scored.

The IMF said in May that, in response to last year’s inflation shock, the government took “decisive and responsible” action to prioritise restoring price stability and achieve the right balance of fiscal and monetary response, while also focusing on growing the economy. The government remain committed to seeking the right balance between fiscal and monetary policy as the UK continues to navigate challenging circumstances.

The OBR confirms policies at the Autumn Statement do not materially impact inflation or demand as we continue to support the MPC to return inflation to the 2% target.