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
Government labour guidelines need to be tightened
While the strike at the Lindsey refinery has now ended, there are concerns that the UK government is afraid to install legal guidelines regarding future employment of UK workers. However, they have issued informal guidelines which require foreign companies working in the UK to appreciate the need to employ local labour. The new guidelines for those seeking government contracts will also confirm th...
Read MoreConfidential details go missing at Rural Payments Agency
In yet another shocking lapse in security it has been revealed that around 100,000 farmers have become embroiled in a data loss situation at the Rural Payments Agency with CDs and tapes having been missing for over a year. These CDs and tapes contained confidential information on each and every farmer in the UK which included bank details, addresses and security passwords offering access to variou...
Read MoreUS consumer confidence figures push markets lower
A surprise drop in US consumer confidence figures saw the US stock market fall by 0.5% today at a time when many believed the market was on the verge of another rally. While the fall today may seem insignificant in the overall picture, there is a feeling that perhaps some investors in the US have "got ahead of themselves" with regards to the US economy and a potential recovery in the short term.
Bankruptcy Numbers Show Fall From Last Year
Despite the fact that the worldwide economy is on a slippery slope it seems that less people filed for bankruptcy in the first quarter of 2008 compared to the same period last year. Figures released by the Ministry of Justice show that 13,080 people filed for individual bankruptcy in the first three months of 2008, a fall of 13% compared to the same period last year. However, the figures are w...
Read MoreStudent loan system needs ‘urgent review’
22/07/2014 The student loan system is at its “tipping point” and is in need of an “urgent review”, according to a report from a group of MPs. The report, which was produced by the Business, Innovation and Select Skills Committee, claimed that the situation is so bad that the “continued existence” of the student loans system may be under threat. The figures claimed that because...
Read More