The Consumer Price Index (CPI) has announced that the UK’s inflation rate fell to 1.2% in September 2014.
A fall of 0.3% from the 1.5% recorded in August 2014, this rate of inflation represents the lowest since 1.1% seen in September 2009.
The Office for National Statistics (ONS) reported that lower energy, food, and transport price have contributed to the fall in inflation.
There was a resultant drop in the value of the pound against the US dollar, from 1.61 to 1.595.
David Kern, chief economist at the British Chambers of Commerce (BCC) said:
“These figures confirm that inflationary pressures in the economy remain muted and have eased in recent months.
With oil and food prices now falling, there is a possibility that CPI inflation will fall below one per cent before the end of this year. This fall in inflation, coupled with weak wage growth, reinforces our call for the MPC to keep interest rates at their current level for the foreseeable future.”
“Recent surveys show that the recovery is on track, but is still fragile and faces challenges.
“Given global economic uncertainties this is clearly not the time to put the recovery at risk with premature interest rate increases.”
Words: Peter Cribley