By bizn_fun 
UK inflation currently stands at 3.5%, with OBR forecasts suggesting it will drop to 2.5% next year, before returning to the Bank of England’s 2% target from 2027.
Asked about the impact of the Budget on inflation, Ms Lombardelli, the Bank’s deputy governor for monetary policy, said: “We think it will reduce inflation by between 0.4% and 0.5% for a year from the second quarter of 2026.
“That is purely a mechanical effect of the changes in energy prices, fuel duty, lesser electric vehicles and rail.
“That will just shift inflation. That is by far the biggest impact for us.”
In her second Budget as chancellor, Reeves extended a 5p cut in fuel duty until September next year. She also removed green levies from energy bills and general taxation in a move the Treasury said will save households £88 per year, while scrapping a customer-funded scheme to help low-income households insulate their homes, saving a further £59.