Saturday 20 January 2018

Boost for UK households as inflation rate rooted at zero

The Bank of England
The Bank of England

David Milliken and William Schomberg

British consumer price inflation held steady at a record-low 0pc in March, official figures showed yesterday, boosting households' disposable income before May 7's general election.

The Office for National Statistics (ONS) said consumer prices rose 0.2pc between February and March but compared with a year earlier, prices were unchanged, in line with economists' forecasts.

The ONS added that if the price change was calculated to two decimal places, however, prices were 0.01pc lower than a year before, which would be first fall on record in consumer price inflation on that measure.

Inflation has not been this weak since at least 1989, when comparable data began.

The statisticians said that a rough estimate based on other figures suggested that the country's inflation was the weakest since isolated price falls in 1959 and 1960.

This leaves inflation well below the Bank Of England's 2pc target and the headline measure calculated to one decimal point is expected to dip below zero.

But for now few economists think Britain is at risk of the Japanese-style entrenched price falls that have threatened the Eurozone.

The figures are likely to be welcomed by most Britons in the run-up to May 7's closely-fought general election, after years of prices outstripping meagre growth in wages.

The opposition Labour Party has focused heavily on what it describes as a 'cost of living crisis', saying that average households are worse off than when Conservative Party Prime Minister David Cameron came to power in May 2010.

The fall in inflation has been driven by the slump in oil prices over the past year.

Irish Independent

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