UK Inflation Falls To 3.4%

21 March 2012 09:00am - Florence Fullalove

    



UK Inflation Falls To 3.4%

According to the Office for National Statistics, the official rate of inflation, the Consumer Prices Index, fell to 3.4% last month from 4.6% in January. Retail Prices Index inflation, including mortgage interest payments fell 4.7% from 3.9%. This fall was mainly thanks to a fall in electricity and gas prices, with average bills down 1.3% and 0.9%. All of the six big energy companies have announced price cuts and reductions. Inflation has been falling since September 2011, when it hit 5.2%, but remains above the Bank of England’s 2% target.

This continued falling inflation will be welcomed news for struggling households, and the good news is set to continue and further falls are expected in the next few months. Many people have been struggling with a mix of high inflation, rising unemployment and low wage growth.  However, economists had expected a larger fall to 3.3%, but a rise in food and alcohol prices limited February’s drop.  David Kern chief economist at the British Chambers of Commerce said, “The marked increases in world oil and food prices since the beginning of the year are worrying, and support our view that further declines in domestic inflation, both year and next, will not be as sharp as the Bank’s Monetary Policy Committee predicted in its inflation report.”

 

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Related Links :
Office for National Statistics - Consumer Price Indices
Bank of England - Central Bank of the UK
British Chambers of Commerce - The Business Network
Latest News - For regular news updates

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