This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-34514135
The article has changed 7 times. There is an RSS feed of changes available.
| Version 4 | Version 5 |
|---|---|
| UK inflation rate turns negative again | UK inflation rate turns negative again |
| (about 2 hours later) | |
| Inflation as measured by the Consumer Prices Index fell to -0.1% in September, official figures have shown. | Inflation as measured by the Consumer Prices Index fell to -0.1% in September, official figures have shown. |
| The Office for National Statistics (ONS) said that a smaller than usual rise in clothing prices, and falling motor fuel prices, were the main contributors to the drop in the rate. | The Office for National Statistics (ONS) said that a smaller than usual rise in clothing prices, and falling motor fuel prices, were the main contributors to the drop in the rate. |
| There was also a fall in the price of household gas. | There was also a fall in the price of household gas. |
| The CPI rate has been at or close to zero for most of this year. It was last in negative territory in April. | The CPI rate has been at or close to zero for most of this year. It was last in negative territory in April. |
| Food prices fell by 2.5% in the year to September in the wake of continued supermarket price wars. This means that prices in the sector fell for the 15th month in a row. | Food prices fell by 2.5% in the year to September in the wake of continued supermarket price wars. This means that prices in the sector fell for the 15th month in a row. |
| Meanwhile, petrol prices fell by 3.7p per litre over the year, and diesel prices - at 110.2p per litre - are at their lowest in close to six years. | Meanwhile, petrol prices fell by 3.7p per litre over the year, and diesel prices - at 110.2p per litre - are at their lowest in close to six years. |
| The Retail Prices Index (RPI) inflation measure fell to 0.8% in September, from 1.1% in August. | The Retail Prices Index (RPI) inflation measure fell to 0.8% in September, from 1.1% in August. |
| Analysis: Kevin Peachey, personal finance reporter | Analysis: Kevin Peachey, personal finance reporter |
| The official inflation figure from September has been significant over the years, as it is used as a guide when setting rises in various benefits, which take effect from the following April. | The official inflation figure from September has been significant over the years, as it is used as a guide when setting rises in various benefits, which take effect from the following April. |
| Chancellor George Osborne has already announced that a number of working age benefits, such as Jobseeker's Allowance, child benefit and some housing benefit, will be frozen from April anyway, as part of a four-year freeze. | Chancellor George Osborne has already announced that a number of working age benefits, such as Jobseeker's Allowance, child benefit and some housing benefit, will be frozen from April anyway, as part of a four-year freeze. |
| But other entitlements - such as public service pensions, as well as disability and carers allowances - will be set using the latest CPI figure as a template. | But other entitlements - such as public service pensions, as well as disability and carers allowances - will be set using the latest CPI figure as a template. |
| The law does not allow for a downrating of benefits, so the practical effect is that these benefits are likely to be frozen from April too. | The law does not allow for a downrating of benefits, so the practical effect is that these benefits are likely to be frozen from April too. |
| The exact change, or lack of it, will be approved by the government in the coming weeks. | The exact change, or lack of it, will be approved by the government in the coming weeks. |
| The figures will be a blow for the millions of people who are on public sector pensions, and those receiving the state second pension. | |
| On the flipside, the main state pension will continue to rise faster than the current inflation rate. From April, the state pension will go up by at least 2.5%, owing to what is known as the "triple-lock" protection. | |
| 'Benign outlook' | 'Benign outlook' |
| Ben Brettell, senior economist at Hargreaves Lansdown, said the latest CPI figure meant there was "no pressure on the Bank of England to lift interest rates". | Ben Brettell, senior economist at Hargreaves Lansdown, said the latest CPI figure meant there was "no pressure on the Bank of England to lift interest rates". |
| Last week, the Bank said it did not expect inflation to reach 1% until spring 2016. | Last week, the Bank said it did not expect inflation to reach 1% until spring 2016. |
| Mr Brettell added that CPI inflation was expected to climb in the coming months, as the big drop in fuel prices would fall out of the year-on-year calculation. | Mr Brettell added that CPI inflation was expected to climb in the coming months, as the big drop in fuel prices would fall out of the year-on-year calculation. |
| He added: "But core inflation, which strips out volatile components like food and energy, also remains weak at 1.0%. This offers little suggestion that underlying inflationary pressures are building in the UK economy, despite continuing strength in wage growth." | He added: "But core inflation, which strips out volatile components like food and energy, also remains weak at 1.0%. This offers little suggestion that underlying inflationary pressures are building in the UK economy, despite continuing strength in wage growth." |
| David Kern, chief economist at the British Chambers of Commerce, said they expected inflation to remain at or below 0% for most of this year. | David Kern, chief economist at the British Chambers of Commerce, said they expected inflation to remain at or below 0% for most of this year. |
| "Our forecast is that annual CPI inflation will start to creep upwards early in 2016, but will remain below the 2% target well into 2017," he added. | "Our forecast is that annual CPI inflation will start to creep upwards early in 2016, but will remain below the 2% target well into 2017," he added. |
| "The benign outlook for inflation is also reinforced by our quarterly economic survey, which shows that the proportion of manufacturers expecting to raise prices has fallen to a five-year-low." | "The benign outlook for inflation is also reinforced by our quarterly economic survey, which shows that the proportion of manufacturers expecting to raise prices has fallen to a five-year-low." |