Christmas boost as inf lation falls
MILLIONS have received a preChristmas financial boost after inflation fell to a three-year low.
In its final update on the price of living before the General Election, the Office for National Statistics (ONS) revealed the CPI measure of inflation stood at 1.5 per cent last month.
This is down from 1.7 per cent in September, and the lowest level since November 2016. The drop was mainly due to a fall in energy bills after watchdog Ofgem lowered price caps last month for around 15 million households, the ONS said. Gas and electricity prices fell by 8.7 per cent and 2.2 per cent respectively in October from September, it added.
The slowing pace of inflation means workers will be able to keep more of what they earn as they prepare for Christmas. Savings expert Kevin Brown of Scottish
Friendly said: ‘A fall in inflation is good for shoppers and savers as it means the money in their accounts goes further.’
Howard Archer, chief economic advisor to the EY Item Club, described the fall in inflation as ‘decent news for consumer purchasing power’.
On Tuesday the ONS also revealed that average earnings had risen 3.6 per cent in the past year, well over twice the rate of inflation. The figures were seized upon on by Tories, who are seeking to focus attention on the economy during the election campaign. Education Secretary Gavin Williamson wrote on Twitter: ‘For low inflation, lower taxes and rising wages, vote Conservative.’ The slowdown in the cost of living has also provided a boost for savers. According to a report by Moneyfacts there are now 224 savings accounts that pay more than inflation.
Two years ago there were none, meaning the value of money in savings accounts was being eroded.