UK Inflation Falls

UK Inflation Falls.

The Office for National Statistics has released figures that Consumer prices Index (CPI), headline Inflation rate for November 2013 has fallen to 2.1%pa. 

RPI, the old measure for inflation which includes property costs, remained the same at 2.6%pa for November 2013.

Comment 

The fall in CPI is attributed to power bills and food costs falling and was expected.

Fuel bills, i.e. petrol and diesel and other transportation costs alongside entertainment and recreation have risen. 

Most analysts expected this inflation fall but we do expect a longer term sustained period of inflation as the economy warms.

The immediate impact, although whilst the link of interest rate setting to inflation has been removed, we believe it relieves pressure on the Bank of England to not be forced to increase interest rates in the short term.