Qualified advisers answering your
Financial Questions
call 0800 092 1245

Inflation falls to lowest level since records began

Inflation fell to the lowest level ever recorded in January, relinquishing financial pressure on consumers across the UK.

The consumer prices index was first recorded in 1989, and industry experts have predicted that it could still fall further in the coming months.

Official figures confirmed that inflation had fallen from 0.5 per cent in December to 0.3 per cent on Monday, with the slide in global oil prices accredited with having the biggest influence, while lower food prices also contributed.

While there are no official figures to measure against before 1989, the Office for National Statistics (ONS) predicted that the rate of 0.3 per cent is the lowest since 1960, after they used models that date back to before the index was created.

The price of a barrel of oil fell to its lowest level in six years, costing $45, but the ONS said that inflation could have fallen even further if the fall in clothing prices hadn’t slowed. The ONS did however say that a greater number of discounts in December than previous years were the cause of this, and that in the coming months this may return to previous levels.

The cost of food and drink fell to a level that is now 2.5 per cent lower than 12 months ago, with the supermarket ‘price war’ and lower commodity prices passing on savings to the consumer.

Among fears of price deflation, most economists agree that Britain is in less danger than the Eurozone. They dismissed worries centred on the kind of economic stagnation that has affected Japan, with the main reasons being the continued strength of consumer spending and the fact that wages are starting to rise.

House price inflation also fell slightly, from 9.9 per cent in November to 9.8 per cent for December. London property prices are continuing to rise above the national average however, and showed an increase of 13.3 per cent, while prices in the south-east rose by 7.4 per cent.

Need financial advice?

If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.

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