Christ­mas boost as inf la­tion falls

Daily Mail - - News - By James Salmon As­so­ciate City Edi­tor

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.

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