Inflation Figures Released

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The Office of National Statistics released figures for inflation to November today (19 December), revealing that the Consumer Prices Index was unchanged at 2.7% and the Retail Prices Index fell from 3.2% to 3%.

There was significant upward pressure on both measures as a result of food price rises and the recent increases in domestic energy bills, whereas downward pressure came from lower prices for fuel, furniture, household equipment and maintenance. The difference between the two measures this month can be accounted for by a fall in mortgage and insurance payments that are included in the RPI measure, but not the CPI measure.

Commenting on the figures, Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce, said: “A slight fall in the Consumer Prices Index had been expected by many analysts and may have added a little festive cheer for consumers, despite them still seeing incomes squeezed by inflation, so this is a little disappointing.

"The impact of higher energy bills is already putting upward pressure on inflation along with food prices and, looking ahead, increases announced by energy firms will enter the measure of inflation and it will move beyond 3%. Whilst this news will come with January or February’s release, in reality many consumers will already be seeing higher inflation ahead of Christmas. Reports suggest spending is up on last year ahead of Christmas, but retailers will see a fall in demand in the New Year as that squeeze on incomes bites harder.”