Inflation Falls To Lowest In Over Two Years
UK inflation fell to its lowest level in more than two years last month, providing some welcome relief to household budgets, official figures have shown.
The Consumer Price Index (CPI) rate of inflation fell to 3% in April, compared with 3.5% in March, its lowest level since February 2010, the Office for National Statistics (ONS) said.
Inflation has fallen from a 5.6% high last September due to the waning impact of the VAT hike at the start of 2011, falling energy, food and commodity prices and a number of bill cuts from utility providers.
The weak economic climate has forced many retailers to cut their prices in an attempt to draw in customers, with the latest figures showing clothing and footwear prices rose by just 0.2% over the month compared with 1.4% last year.
Softer excise duty rises on alcohol and tobacco, as well as lower air fares due to the timing of Easter, also helped keep a lid on the rising cost of living.
Michael Saunders, economist at Citigroup, told Sky News he expected inflation to continue to fall in the coming months.
The sharp decrease also means Bank of England Governor Sir Mervyn King has narrowly avoided having to send his tenth letter to Chancellor George Osborne to explain why inflation is higher than the Government's 2% target.
At 3% it is now within one percentage point of that goal, negating the need for an official note.
The Chancellor said the decrease was good news, adding: "This brings welcome relief to families on tight budgets."
But the fall in inflation in April is likely to bolster the case for the central bank to pump more emergency cash into the economy through its quantitative easing (QE) programme.
The UK economy entered a technical recession in the first quarter of the year as gross domestic product declined 0.2%, following a 0.3% drop in the final quarter of 2011.
The most significant upward contribution to living costs last month came from restaurant and hotel prices, which rose 1% compared with a 0.6% increase a year ago.
Housing and household services also had an upward effect as lower utility bills were overshadowed by higher rents.
The alternative measure of inflation, the Retail Price Index, also fell to 3.5% from 3.6% in April.
:: The inflation figures came as the International Monetary Fund said the UK should consider another round of QE or make a reduction in the base interest rate from its record low of 0.5% to help boost the ailing economy.
what do you think?
Well this is good news. What it means is that with incomes not rising ( only for those that don't pay top rate tax of course), we are all getting worse off at a slower rate than we were last year. And for the coalition, that of course is Good News !!
NO QE NO QE NO QE NO QE Stop monetising the debt!
we can all belive this c@@p cant we.makes it look like there policys are working and we all know unless your a millionaire businessman or mp we are all worse off thanks to the coalition.thanks for nothing
Does this mean the Tories/ Lib Dem have finally got on top of sorting out 10 years of labours mis-mangement
That's what they want you to believe they have done. But surely only the gullible would be taken in by that, wouldn't they?
Stephen It will take longer than 2 years to sort out the mess when labour came into power government spending was 35% of GDP an falling on departing it was 45% and rising,
Someone needs to tell Tesco! Tonight I was going to buy our cat a little bag of treats which last week was priced at 65 pence. But tonight they are priced at 79 pence. THAT IS AN INCREASE OF 20%! Needless to say, they stayed on the shelf. I have noticed that increases of 30% in Tesco are not uncommon. EVERY LITTLE HELPS. I bet it does.
Your poor moggy missed out on a treat. Another victim of this heartless & gutless coalition.
Cat milk has risen by 52p.... at Tesco disgusting
Stephen, it's the kittens I worry about!
The ONS has stopped puting Petrol, Diesel, Gas and electricity into the inflation figures. They have also stopped putting in mortgages, loans, credit card rates and overdrafts. They now cancel EVERYTHING which increases. Flights have actually increased in costs, and the only reason prices are falling in some shops is because they are losing millions because we do not have any money to spend. The cost of food from supermarkets have risen by 5% and in April petrol and diesel went up by 8% but these are now out of the inflation figures. The ONS are as bad liars as Mervyn King, Cameron, Osbourne and Clegg.
What total rubbish
Whunegrs and whiners day out - any good news is typically met with derision and scorn
The Chancellor said the decrease was good news, adding: "This brings welcome relief to families on tight budgets." Is he having a laugh? Is he on the same planet as everyone else? Has he filled up his car on fuel recently? Or is he just insane? This has made ZERO difference to my quality of life and to most of the population. What a complete and utter idiot, go back to the freezer youve just been defrosted from. Could someone PLEASE print this off and show it to him!!!!!
It's the old crumbs from the table thing, Fred.
Why is my shopping bill still rising?