UK inflation falls to 1.9% in January
18/02/2014
The UK’s inflation rate, as measured by consumer prices index (CPI) fell below the Bank of England’s target for the first time in over four years in January.
The reduced inflation rate is largely due to a fall in costs of recreational and cultural activities such as DVD prices and lower entrance fees to local attractions. Additionally, reductions in the costs of other items such as alcohol, tobacco and household goods helped to reduce the rate of inflation.
Prime minister, David Cameron tweeted his positive sentiments in relation to the newly announced figures, announcing that he felt they supported the government’s economic strategy.
"Today's fall in inflation is more evidence our long term economic plan is working," Mr Cameron tweeted. "We want to ensure a secure future for hard-working people."
Furthermore, the fall is likely to support the Bank of England Governor’s recent suggestions that base interest rates will not be increased in the near future, as they remain at the benchmark low of 0.5%.
The British Chambers of Commerce, Chief Economist David Kern supported this saying that: "An economic environment of low inflation and low interest rates allows people and firms to plan ahead, as they can be confident they will not encounter any unwelcome surprises."
However, Labour did state that they feel the drop in the rate of inflation will make little difference to the working population as Treasury Minister Cathy Jamieson stated: "This small fall in the inflation rate is welcome, but with prices still rising much faster than wages the cost-of-living crisis continues."
Need Advice?
If you need to ask a financial question then please contact one of our qualified financial advisers online or over the phone to get help with your query.
Share this..
Related stories
Travel ban costing industry millions of pounds a day
Travel giant TUI Travel has today confirmed that the ongoing disruption caused by the volcanic ash emerging from Iceland is costing the company up to £6 million a day. While the welfare of customers is paramount with many stranded overseas, there are fears that the industry, still weak after the UK recession and the credit crunch, can ill afford to take such a massive hit with the travel disrupti...
Read MoreBritish Bankers Association cool on immediate economic outlook
The British Bankers Association (BBA) has confirmed that mortgage approvals in the UK are now double the level they were when the credit crunch was at its worst last November but the association is playing it cool with regards to the immediate economic outlook. There has also been confirmation that many UK mortgage holders are paying back more than they need to which is being seen as a negative as...
Read MoreBank 'might cut rates again'
A further cut to interest rates from the Bank of England is expected later this week.Groups including the British Chamber of Commerce (BCC) believe that the Bank rate will be reduced from its current level of two per cent.The markets have priced in a 50 basis point reduction to 1.5 per cent - which would be the lowest official rate in the Bank's 300-year history.Reducing the Bank rate generally le...
Read MoreUK Sterling notes may be replaced by plastic cash
Australia introduced the concept over a decade ago and a number of countries like Romania, Vietnam, Mexico and Malaysia, have followed suit. It now looks as though the UK could to turn to polymer based bank notes to replace the current paper ones. It’s thought that the English £5 note becomes haggard after around six month, while the Australian equivalent lasts around 40 months. When taking...
Read MoreLloyd's TSB appoint new retail division director
Bosses at Lloyds TSB have announced that finance director Helen Weir is moving to head up the banks retail division. Helen Weir, 45, was offered the position after previous Lloyds TSB retail director Terri Dial, left the company to become chief executive of Citi Bank consumer banking division. Industry insiders predict the move could be the ideal stepping stone for Weir who is thought to be the...
Read More