Cost of living slides thanks to Christmas price cuts
Wednesday 18 January 2012
The sharpest slide in the cost of living for nearly three years offered some relief for squeezed household wallets yesterday, amid festive price-slashing and easing pressure from petrol prices and energy bills.
December's fall in the Bank of England's consumer prices index (CPI) benchmark from 4.8 per cent to 4.2 per cent – the biggest drop since April 2009 – heralds a year of steeply falling inflation after four years of wages trailing well behind the cost of living.
The fall should ease any remaining concerns at the Bank of England over lingering inflation and paves the way for rate-setters to give another boost to a struggling UK economy through quantitative easing – in effect printing money – next month. The recent price cuts by the "big six" energy companies will also feed through to lower inflation in the months ahead.
Petrol prices dropped by an average of 1.1p last month compared with a 3.2p rise a year earlier, dragging down the inflation rate according to the Office for National Statistics.
Gas prices also held steady during December, while retailers were forced into deeper Christmas discounts than last year. Clothing and footwear prices fell by 2.8 per cent between November and December as womenswear prices were slashed.
Even bigger falls in inflation are expected next month when the VAT rise to 20 per cent – introduced by George Osborne a year ago to help tackle the deficit – falls out of the figures.
Despite the cheer on inflation, figures today are set to reveal a fresh rise in unemployment after hitting 2.64 million in the quarter to October.
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
- 5 Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: Police will be on high alert on Friday whatever the result
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...