The October 2022 peak was a 40-year high for Britain, according to the ONS.

“The largest downward effects came from food and non-alcoholic beverages, recreation and culture, and furniture and household goods,” the ONS said. “Transport provided the largest, partially offsetting, upward contribution.”

While Prime Minister Rishi Sunak hailed the inflation number as great news, shadow Chancellor Rachel Reeves said British households still face “acute” cost of living pressure.

“Inflation was far too high. That’s why I made bringing it down my absolute priority,” Sunak said on X. “The fact it’s now back down to normal levels is good news for every family in the U.K.”

Reeves said the 2% inflation figure is welcome news but not the end to high price challenges faced by British families.

“Unlike Conservative ministers, I’m not going to claim that everything is all fine, that the cost of living crisis is over, because I know that pressures on family finances are still acute,” Reeves said.

Senior European economists Azad Zangana of Schroder’s seemed to echo that sentiment, warning that higher inflation could return in the second half of 2024.

“From the third, fourth quarter onwards, you might start to see a bit more upward pressure coming through as the Bank of England has warned,” he told CNBC.

Despite the good inflation news, the Bank fo England Thursday is expected to keep interest rates steady at 5.25% rather than cutting rates.

Financial market investors are expecting the bank to cut interest rates in September and in December.

The monetary policy committee at the Bank of England has forecast another inflation increase toward 3% later this year but expects it to drop to 2% again next year.