Financial News
- 19 September 2012, 12:39
Inflation Eases As Oil Edges Higher
The annual pace of inflation slowed last month despite a rise in oil and fuel costs, according to figures released by the Office for National Statistics.
The ONS said the year-on-year consumer prices index (CPI) stood at 2.5% in August, down 0.1% from a month earlier.
The CPI figure matched the forecast by the ONS.
It added that the retail prices index (RPI) eased to 2.9% last month, down 0.3% from July.
The Bank of England (BOE) had been hoping for inflation to ease back towards its target of 2% by early 2013.
The inflation fall helps boost cash-strapped Britons' spending power and supporting consumption.
Easing price pressures for furniture, health, household services and clothing helped bring the annual inflation rate down, the ONS said.
Although there were upward inflation blips in March and July, it has fallen since reaching a peak of 5.2% last September.
The upward inflationary pressure comes from climbing oil prices - now nudging a four-month high - along with higher commodity costs.
The United Nations warned recently of rising grain costs due to drought in the United States and inferior harvests in some other primary producer countries.
BOE policymaker Ben Broadbent, who voted against the latest round of quantitative easing in July, has voiced concerns about the underlying inflation pressures.
Still, most economists expect the central bank to increase its purchase of Government bonds beyond the current approved limit of £375bn, once the current £50bn round is completed in November.
:: In a separate release, the ONS said that house prices rose 2% over the 12 months to July - down 0.3% on the year to June.
what do you think?
john
Lies, d*mn lies, and statistics.
Edgar Beckett
OOHHH ! goodie now we shall be able to donate more to our less fortunate friends overseas.
Grant Berry
Good news interest rates will remain low !!! yeauuussssssss!!!
gengisken1227
I can't see real inflation doing anything but jump in the future when the drought hit cereal harvests increase food prices
Anthony Smith
The ONS inflation statistics are as equally and totally out of touch with reality as the unemployment figures....and virtually all current Government policies!! Some kind of connection there, maybe?!!!
Jonathan Goodwin-Self
Everything the ONS says is a total lie. Prices over 2.5 years have increased on everything we buy by about 75% but they say no. Unemployment in real terms is about 9 million but they say it is 2.5 and is falling. They say that the price of petrol is 1.32 a litre when in the entire country the cheapest is 1.39 on diesel they say it is 1.38 but its about 1.44 they now say that gas and electricity has fallen but its rised by 9%. Who buys furniture and clothes every week. No one. We all buy petrol and diesel and food and those prices are soaring up but they have now said that 1 item of food, which no one ever buys has dropped by 2p They are as bad as Cameron and Osborne
Grant Berry
drivel, you been drinking mate?
Jonathan Goodwin-Self
8:54am on 18/9/2012
So when prices over the past month have increased by about 10% they drop inflation. Last month they said that prices had gone up by 15% and they put up inflation by0.1% . It is now estimated by the Treasury that in 2 years all prices have increased by 50% but the ONS is taking off from their figures anything which increases. Oil, petrol, diesel, gas, food, clothes,insurance, bank charges in fact 90% of everything is not in their figures.