James Moore: These latest CPI numbers add up to very bad news for Labour
Outlook Are we seeing the end of the cost-of-living crisis and with it one of Labour's best lines of attack against the Coalition Government?
Inflation, as measured by the Consumer Prices Index (CPI) yesterday crawled in at just 1.6 per cent.
This is the sixth-consecutive fall in CPI and the first time it has happened since records began in 1997. CPI inflation hasn't been this low for four years and it's almost halved since the 2.9 per cent it reached last June.
What really matters, however, is that wage rises are finally starting to outpace price rises. That is what may deprive Ed Milliband of a barb that has consistently drawn blood. Worse for him is that economists think the trend could continue with the inflationary impact of increasing pay dampened somewhat by productivity gains combined with a stable outlook for commodity prices.
That last factor is providing real daylight for the Coalition. Petrol prices, for example, have remained flat over the last year. Of course, the price of oil, and commodities generally, is not something under the control of governments of whatever hue. But the taxation of it is and the Coalition's short-sighted abandonment of green levies helps there, having reduced household bills. Political pressure on energy companies hasn't hurt either.
So far the improvement in living standards brought about by wages outstripping prices for the first time since way back in 2008 is marginal at best. And the TUC points out that workers are still £40 a week worse off than before the crisis.
But memories are short. The evidence on the ground is that consumers are feeling more comfortable than they have for some time. The economy's recent improvement has been driven by them reaching into their wallets and purses, spurred by low interest rates and low prices.
In fact there is only one commodity where prices are consistently rising, and that's housing, where they are shooting ahead at a speed which really ought to start worrying the Bank given the very real dangers of a bubble being created.
Unfortunately for Mr Milliband's short-term prospects, inflation in that sector tends to make homeowners feel richer even if it is an illusion in reality.
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
PornHub turns masturbation into energy in bid to save the planet
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...