Qualified advisers answering your
Financial Questions
call 0800 092 1245

Inflation falls less than expected

The rate of inflation in UK, as measured by the Consumer Price Index (CPI), fell last month to 2.2% from 2.3% the previous month. Analysts had expected a more significant fall to around 1.9% and the recent strength would seem to indicate that the prospect of deflation is lessening by the month. The Retail Price Index (RPI) inflation measurement is already in negative territory although it edged up from -1.2% to -1.1% which was significantly stronger than the -1.5% forecast by analysts.

The belief is that as the UK economy starts to recover we are starting to see food prices and other everyday items stabilise and even edge higher. The problem which the UK government have at the moment is that if the economy does pick up fairly sharply and interest rates are not increased quickly enough then we could enter a phase of hyperinflation. This would see prices increase at a significant rate, pay deals follow suit and could jeopardise any future recovery in the UK economy.

There are still many difficult hurdles and difficult problems for the UK government and the Bank of England to navigate through over the coming months. While we can see the light at the end of the tunnel the tunnel is still fairly long!

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details