PRICE IS RIGHTER

Inflation has fallen further – but experts warn it could be a blip.

The Consumer Prices Index, the Government’s preferred way of measuring rising living costs, slowed to 2.4% last month. It means more workers are finally seeing their wages rise faster than inflation.

But economists say the weak pound and a jump in oil prices could drive inflation back up.

Andrew Sentance, senior economic adviser at accountant PwC, said: “The most likely scenario appears to be that UK inflation will remain stuck around 2.5% over the summer and could pick up in the next couple of months.” Slowing inflation also makes it less likely the Bank of England will raise its base rate soon – which is good for borrowers but bad for savers.

Jacob Deppe, of online trading platform Infinox, said: “With inflation falling yet again and the economy in a near-catatonic state, the odds of a rate rise in 2018 have lengthened significantly. Short of an economic miracle in the second half of the year, the chances of a rate rise before 2019 are remote at best.”

TUC General Secretary Frances O’Grady said: “With the worst pay squeeze for two centuries, what people really need is higher wages, not higher interest rates.”