The latest official figures show prices were flat (zero inflation) for the last months of 2023 (September to December inclusive), and food prices are actually falling. That is true on both CPI and RPI measures of inflation.
The published “headline” figure shows “4% inflation”: that is the movement from December 2022 to December 2023. With increases won in the 2022-23 strikes coming through, average real regular wages (seasonally adjusted) recovered a little (2.2%) from March 2023 to Dec 2023. Still wages have not recovered from the impact of high inflation in 2021-2 (6% decline between April 2021 and March 2023), and public sector wages definitely not from the squeeze on them since 2010.
The Bank of England is keeping its standard interest rate high by historical standards at 5.25%, worrying that otherwise wages will rise. Former Bank chief economist Andy Haldane says that such rates are likely to “crush the economy”, continuing the recession which started late 2023.
The other effect of a high Bank rate is to push up the government’s cost of borrowing, tightening the squeeze on public services and investment.