Economy: Inflation Nears Three Year Low
The headline rate of inflation has eased to a near three-year low of 2.2% in a welcome development for household budgets but not for people claiming benefits or the state pension.
The figure was flattered by sharp rises in gas and electricity prices a year earlier falling out of the calculations but experts warn the latest round of energy bill increases will force the Consumer Prices Index (CPI) measure higher in the coming months.
September's CPI figure, which is the lowest since November 2009, is traditionally used by the Treasury to determine next April's increases in the state pension and benefits.
Such claimants did well last September when CPI stood to 5.2% so the latest number signals a far weaker rise to benefit cheques next year.
But experts expect price pressure on consumers to grow again with food costs starting to rise following poor harvests as a result of drought and floods.
Customers of British Gas, Scottish Power, Npower and SSE will also be paying more for their household bills this winter.
EDF Energy and E.On are the only two suppliers within the so-called 'big six' yet to confirm their plans.
Howard Archer, chief economist at IHS Global Insight, agreed the September inflation figures could mark the trough in recent falls.
He said: "Consumer price inflation could well be pushed back above 2.5% by the move back up in petrol prices, some utility bills rising in October and November and likely higher food prices."
Philip Shaw, chief economist at Investec Securities, warned CPI would hit 3% by mid-2013.
He said: "A near tripling in university tuition fees should push CPI inflation up in October, with further food and energy price increases likely to add to that rising trend."
A rising inflation outlook could hold policymakers back from launching more quantitative easing (QE).
Many economists believe the Bank of England will pump more cash into the economy in November but rising price pressures may dampen QE expectations.
Three of the nine rate-setters on the Monetary Policy Committee (MPC) have voiced concern over the inflation outlook.
A return to economic growth in the third quarter of the year, meaning the UK would exit recession, could also weigh on the minds of those on the MPC.
what do you think?
but not for people claiming benefits !!!!!!!!!!!!!!!!!! boo hooo, get a job.
Windows Live User
give me yours then
well said windows you pay n/i for 30 years lynchy thinks its his money . news for you its my money
heh, "windows" remember that bloke in "the thing" called windows ?
My food bill has risen, my energy charges have risen, the CPI is a sick joke.
how can anyone disagree? haha
they should cut interest rates now..........Yeeeeusssssss !!
still not looking good for you on our 20 quid bet Grant is it ??? lol
not even mid term Lee, the stats show that at this stage they are infront of where liebour were when they were at this stage & they got re-elected. So not sure what you mean...........old chum
have you taken your pills today grant
by heck stephen at this rate you might even after get a job..........dont want to worry you. Just remember though ..no pickles on my big mac please
Grant that only increases inflation and also has an effect on deposits
Grant what kind of English is " after get a job" and whats wrong with working at McD's there are many university graduates behind their counters, perhaps you could point them to all these blue chip jobs you say are available. I'm sorry to hear your struggling and have no savings left with needing the interest rate cutting, surely it would be a bitter pill for most rank and file tory voters.
lol i love the Tories.......................Keep it coming, bye bye scroungers & public sector non-jobs - nice to get you off our tax paying backs !!!
Food in the last year has increased by 100%. All house bills have increased by 40% So how can inflation fall when all prices have gone up by a minmum of 40%
trillions of people agree with you Jonno
jon at least you dont inflate your figures pfffft..........every little helps
I wonder if there is some lag in data or whether we have another error cause my bills like everyone else's are on the up.
if you believe the liars in westminster there you have ( in a nutshell) why britain is a dying country !!
shakes alert !
CPI = CONsumer Prices Index.
if your one of David thatchers millions . he gave you £5 extra pw then increased the rent you pay on your dole money by £7
sorry mate, really not understanding this.
last April jsa went up £5 pw . Cameron increased the rent you pay out of your jsa by £7 i was paying £5 rent before the increase . this report says people on the dole did ok last time . they didn't i now pay £12pw
he gave you £5 and took £7 off you
it was a bit rubbish the way i put it
is that it grant
grant whats your post code
hey bulgin you need a math lesson. see if you can understand this. you get 5 pounds increase then pay 7 pounds more rent duh see its easyyou are 2 pounds per week worse off
Right, I understand now. Bit difficult for me at first as I have never claimed JSA or had my rent paid for me. Typical though. In one hand and out the other as the saying goes.
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Well isnt that funny that after the month when pension increase we are told that inflation will start to rise again CONspirousy by any chance
actually alf it is septembers figures which are used to determine any rise in pensions /benefits SO ITS NO CO-INCIDENCE that septembers figures were doctored down ........... IS IT ??
absolute tosh Its worse than ever fuel for the car 1.45 a litre the gas just gone up 6% and you think we are supposed to believe a figure of 2.2 % .We may have been born at night ............but not last night ! tory muppets .
The way inflation is worked out has allways been absolute tosh. It is a completely unrealistic figure. But there you go, successive govs persist witrh it.
Osborne runs the ONS and has told them that if prices rise then inflation must fall. In September food went up by 20% but they say that it is now out of CPI and so is everyting which increases.
Its ok though cos ive got about 38 trillion quid in the bank. want a sub ?
Jon dont inflate your figures will you..........