Member Article

Slight inflation fall across August

UK inflation fell slightly in August, the latest Consumer Prices Index (CPI) from the ONS has revealed.

The Retail Prices Index (RPI) also fell, from 3.2% in July to 2.9% in August.

Analysis from the ONS said smaller increases in price across furniture, household equipment and maintenance, housing and household services, and clothing and footwear.

These movements helped to partially offset larger increases in transport, particularly in fuel and the cost of rail travel.

The figures will lay rest to claims that the Bank of England’s quantitative easing policy could lead to an increased inflation.

TUC General Secretary Brendan Barber said: “Inflation is not falling fast enough, particularly as wage growth is so anaemic. Real wages have been shrinking for nearly four years now and the prospect of an ease in living standards any time soon looks remote.

“Worse news lies ahead for low-paid workers if the government decides to freeze benefits. The combination of low wage growth, higher indirect taxes, in-work benefit freezes and tax credit cuts add up to an unprecedented attack on the living standards of low-paid workers and their families.”

Graeme Leach, Chief Economist at the Institute of Directors, said: “Inflation is back on the right track after last month’s upward blip to 2.6 per cent. The fall in the headline CPI to 2.5 per cent and core inflation to 2.1 per cent is good news. And next month’s figures should be even better, with the headline CPI falling towards 2 per cent as last year’s utility price rises fall out of the year-on-year index.

“Inflation isn’t falling quite as fast as we expected, due to higher oil prices, but the underlying downward trend is clear, with a flat-lining economy and anaemic growth in the money supply.”

This was posted in Bdaily's Members' News section by Tom Keighley .