Progress or Inconsequential?

It was revealed today by the office for natural statistics (ONS) that the consumer prices index (CPI) fell to 4.8% during November. This was a small decrease from the 5% from the month before. Despite this, however, the rate still remains higher than the Bank of England’s 2% target.

The consumer price index measures changes in the price level of a consumer goods and services purchased by households. On this occasion the fall in the inflation rate is mainly down to a slowdown in the in food and non-alcoholic drink prices. Cereal and vegetable prices also fell by 1% over the same time period contributing to the reduction in inflation rates.

What actual conclusions can be drawn from this fall in the CPI? It could be argued that we have seen the peak in inflation, however, with many leading economists such as Robert Peston believing that a ‘second recession’ is on the way inflation may be on the rise in the near future. That said the fall in the CPI will provide some welcome relief for families over the festive period. All be it minimal with the pay growth still below 2% people will still be in for a festive season of hardships.

Inflation has been a bugbear for savers for a number of years now. This is because high inflation has made it difficult for savers to keep up with rising prices. Despite, the fall in inflation rate today this trend is expected to continue with savers predicted to continue to lose out to inflation.

What are your thoughts on the fall in inflation? Will it have a positive effect on your day to day lives or will it be inconsequential?