Last month saw the lowest rate ever recorded of CPI (Consumer Prices Index) inflation in the UK. The rate, which was 0.5% in December, has now fallen to 0.3%, a decrease which is predicted to continue. The Bank of England has commented on the situation, stating that inflation may even temporarily turn negative sometime in the next few months.
Inflation rate estimates first started to be recorded in 1988, and there are a few reasons for the record low that is now being experienced. The lowered cost of petrol, reduced by 16.2%, as well as a decrease in food prices, are two of the main factors that have had an impact on the current rate. The recent price war that many supermarkets have been engaged in has had a big influence on the lowering of food prices around the country. Other items, such as toys and games, are also experiencing a price reduction.
Although the cost of food and petrol is at a low, the Office for National Statistics has stated that this is not the case for all common goods. The cost of items such as furniture and clothing are still on the rise, but it is still good news for families with tight budgets, as these will now stretch further than previously thought.
The low inflation rate is great news for consumers all over the country, and they are likely to soon enjoy a much more effective purchasing power. Countries around the world are experiencing a certain rate of deflation as oil prices are dropping globally.