Inflation drops to lowest level on record
Inflation fell to 0% in February.
The Consumer Prices Index (CPI) measurement of annual inflation dropped to 0% in February, according to the Office for National Statistics (ONS).
That's the lowest level on record, having fallen from 0.3% in January.
The ONS picked out falls in price in a range of recreational goods (such as data processing equipment, books, games and toys) as well as food, furniture and furnishings as key factors behind the fall.
With inflation now essentially non-existent, any Bank Base Rate rise in the near future is off the cards. Indeed just last month Mark Carney, the Governor of the Bank of England, said that the banking system could cope with Base Rate being cut even further, although that is unlikely at the moment.
With drops in everyday living costs putting a little bit more money in our pockets, now is a good time to try to pay down any debt you have or build up your savings.
The Bank of England does, however, expect inflation to rise again later on in the year as it heads back towards the Government's target of 2%.
Earn up to 5% on your savings with a current account
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Inflation at 0% this must explain why my council tax has risen this year AGAIN by 3.4% or does this not come within the inflation figures, despite non payment is a criminal offence, punishable by imprisonment !!
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Well, the B of E are still printing money to buy their own bonds, and food prices are still going up. But "inflation" at zero? Must be the forthcoming general election.
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I agree with the comments below and in addition to OldHenry's observations I would like to point out that student loans use RPI as their base, even though RPI is now considered by the government to be an obsolete measure. It's also funny how the old RPI measure seems to consistently track higher than the newer CPI, but I guess it's not like they're trying to hide how bad Realflation is or anything.
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29 March 2015