Inflation rates have fallen to a four year low in November

17 December 2013

Down from 2.2% in October to 2.1% in November, an ONS report has revealed that the Consumer Price Index rate has not fallen this low since 2009. Economists believe the fall in inflation is due to the ‘quiet before the storm’ energy bill rise which hasn’t taken effect yet (however inflation is expected to rise in the December figure because of this).  Food prices also stopped increasing over November, causing the sector’s inflation rate to drop by 1.3%. This is good news for consumers stocking up on their Christmas food! Figures also suggest that restaurants and hotels have contributed to the fall in inflation as they have upped their rates for consumers.

The Bank of England is enjoying the news as lower inflation rates allow the Bank to keep interest rates low, letting the economy grow and strengthen. BoE states ‘In the United Kingdom, recovery has finally taken hold. The economy is growing robustly as lifting uncertainty and thawing credit conditions start to unlock pent-up demand. There is still a lot to be done but these latest findings reflect a positive 2014.