Financial News
- 15 February 2012, 12:17
Help For Households: Inflation Falling
The headline rate of inflation has dropped to its lowest level since November 2010, in a sign that the pressure on cash-strapped households has continued to ease.The consumer prices index (CPI) rate fell to 3.6% on an annual basis in January, from 4.2% in December.The performance mainly reflects last year's increase in VAT being stripped out of the calculations.The figure also remains in line with the Bank of England's forecast that inflation will average just over 3.4% in the first three months of 2012.But while the pace of the rise in the cost of living is falling, Bank of England governor Sir Mervyn King will still be forced to pen a letter of explanation to the Chancellor as the rate is more than a percentage point away from the Government's 2% target.He is due to outline the bank's latest inflation report on Wednesday which is expected to stick to its previous forecast that the headline rate will fall below the 2% target by the end of the year.That is despite the cost of oil remaining a concern because of tension in the Middle East - particularly over Iran.Brent crude prices have risen to almost $120 a barrel this month - with petrol prices rising back towards record highs after falling slightly in January.Financial services, air travel, clothing and footwear costs helped fuel inflation last month.But the latest figures help ease concerns that the bank's quantitative easing programme - or asset purchases - is not stoking inflation to the extent some had feared.The Monetary Policy Committee announced plans last week to pump an additional £75bn in to the economy, on top of the £275bn already announced, to boost money supply.This comes as credit ratings agency Moody's issued official notice to Britain and the Bank of England that their credit ratings are on watch for a potential downgrade.Giving his reaction to the inflation figures, Sky's economics editor Ed Conway said: "The effect of higher VAT...is no longer pushing up inflation so this was always going to be quite a bit of a fall."At 3.6% this is more or less in line with what economists had predicted. The only surprise is that the Retail Prices Index (RPI)...is lower at 3.9% than had been expected."The figure, which includes housing costs, is often used by employers as a guage for potential salary increases but the wider economic uncertainty and RPI's high rate have meant the measure has been largely sidelined in recent times.
what do you think?
tagliatellius
Robert Mugabe's quantatitive (printing money) easing in Zimbabwe resulted in a massive rise in inflation there, however, the "brilliant" minds running this country are expecting a different result when they do the same!
Lee Bennett
Absolutely Tag as i posted the other day they have already printed more than the total value of cash in the uk by a very long way .They are papering over the cracks by trying to print their way out of it.It will not work.
John Henderson
It's about time the credit agencies were told exactly where to go - they, "the market", and the banks are the root cause of most of the financial problems countries face today. They contrive to ruin a country's economy at a whim, then move on to the next in line, then the next, and so on. The world would be a better place without many of these utterly useless people.
Grant Berry
Great news........They can keep interest rates low for longer !!!!! Yipeeeeeeeeeeee!!!!!
Name witheld
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peter
With respect, from all of your rantings, I just cannot understand why you live here, or even want to. Why not up sticks and move elsewhere if life is so bad for you. I'm ready for retirement soon, and certainly sunnier shores are drawing me there, but its only the weather that attracts me. I also don't like much of what is going on here, but hey, its a lot worse in Greece, or Africa. You should appreciate what we have in this country - and if you don't like it, then vote for change. How about the BNP or the Greens.
Grant Berry
Well said Peter, why doesnt he follow his own advice "If you dont like it here leave".
keith
Peter. BNP sound a good choice.
david norton
Im fed up with this person too. Its always moaning yet I bet instead of getting out and trying to make a change he/she just sits back and lets others make the decisions. peter well said.
Avril George
Banks just hand out money when they feel like it.county will take time to recover .
Windows Live User
It doesnt matter a jot if inflation slows down. It still means prices are rising but my income is not!!!
Jan N Andy Oakley-Hills
Thought I had mis-read this, I must have got it wrong somewhere 'cos everything we buy is RISING IN COST!!! £660+ for tank of heating oil, EDF electric bill up by £50 despite it being very mild winter, but my cooker still uses the same amount of energy! Car insurance renewal up despite us being older, petrol going up daily! Won't have to worry about food costs rising soon, because we won't be able to afford to buy any!!!! Might as well cancel the dd for tv licence as well, because there will be nothing provided by BBC other than the Olympics!!
Lee Bennett
Well said ,diesel at 1.46 a litre and they say prices are falling .They are living in a dream.They are not in the real world.
Gordon Berry
Prices don't seem to have stabilised as they are still rising. Fuel has just increased in price. If there is a problem in the Gulf oil will rise in price by a large percentage. We need some tax reduction on fuel soon to bring inflation down. There is more to the Bank of England than trying to control inflation. One of their main jobs is to monitor their regulators and to take notice of economic warnings. If they had done that, may be some of the British banks would be in better shape. Something the previous government ignored.
Grant Berry
Socialist dont worry about looking after money, they just waste it. The only time they worry is when some one as a lot more than them.
Lee Bennett
any relation to Grant the lead head ? Gordon. Great comments and very true.
John Henderson
"Help for Households, inflation falling" - which idiot wrote that ? The fact is that prices are still 3.6% higher than they were a year ago and wages (at least for all but the elite) have not risen by that amount. Therefore we are once again worse off. In any case the R.P.I. (rather than the lower CPI) is a more accurate index, but has been sidelined simply because it gave more generous increases to pensions and other benefits, something which our Tory friends simply will not tolerate. They did the same when changing from the Average Earnings Index in 1980. Keep the peasants down and make the rich even more rich is their motto.
Billy Morrison
i dont buy a t.v. a.washer bed settee carpet hoover every week but i do bhy FOOD + electric gas + water + pay rent whos the goverment trying to kid my food bill has nearly doubled my bills for electrc + gas doubled now 20% vat on water where do we get 3% inflation from erm think of a number
Lee Bennett
more propoganda from the money printing brigade ...............does anyone actually believe this tosh.??
tagliatellius
The gobsmiths believe that if they repeat their lies often enough we will believe them, then they try to focus our hatred onto a nutty muslim cleric in the hope that it will divert our anger away from the politicians. I hope one day that the population will wake up and realise that their real enemies are the Westminister gobsmiths.
triciat13
as an american president once said - "there are lies, more lies and then there are statistics" - something like that anyway.
herewegoagain10
the P.M. quite clearly stated today that the government had reduced the duty on fuel. No they didn't, what they did was delay an increase in fuel duty - not a reduction. More lies from this government. Do they actually think that we're stupid and cannot see through the deceit. Just what have they done so far? Cameron dabbles here and there and osborne is a mere puppet of the money men who created this mess
Lee Bennett
Well said herewego .I was starting to think i was the only one who hasn't been taken in by this rubbish.
tagliatellius
The Nathans who are pulling the strings are getting very close to getting their fingers burnt, the populace are waking up to the fact that their "democracy" is a sham, the real power lies with the Trillionaire banking families who own the politicians of all parties. Our dear leaders leaders work for the best interests of their real masters, the super rich parasites who feed off us all.
Mike Drouin
have not seen any proof of this ,in fact just the opposite where do these so called experts ( my ar*e ) get this information from.
Lee Bennett
Written by the experts at the office of tory propaganda.Latest from them the world is square ,the moon is made of cheese and fairys live at the bottom of camerloons garden !! complete rubbish.
Russell Beaumont
7:36am on 14/2/2012
What they don't tell us is when the pendulem starts to swing the other way. Within weeks inflation will probably reach 20% with the erosion of life savings and pensions. this is the outcome of printing worthless money through quantitive easing.
Lee Bennett
2:37pm on 14/2/2012
Spot on Russell