You are here: Home - Household Bills - News -

UK inflation turns positive

0
Written by:
18/08/2015
The UK returned to inflation territory in July, with the Consumer Prices Index (CPI) measure rising to 0.1% from 0% in June.

The Office for National Statistics (ONS) said a smaller fall in clothing prices was the main contributor to the rise in inflation but falling prices for food and non-alcoholic beverages partially offset the rise.

The CPI rate has been hovering around 0% since February. It dipped below zero in April for the first time in 50 years, sending the UK briefly into deflationary territory.

Commenting on the figures, Maike Currie, associate investment director, Fidelity Personal Investing, said: “Up until today, inflation has either been flat or negative for most of this year – a far cry from the Bank of England’s 2% inflation target. This puts the rate rise debate back on the table. Low inflation has meant the monetary policy committee (MPC) remain dovish on raising interest rates, but the tide could be turning on the era of ultra-low rates.

“Earlier this month, the MPC minutes showed one member, Ian McCafferty, voted in favour of an interest rate hike. And in the last few days, Kristin Forbes, another MPC member, has voiced her concerns about keeping rates at record lows saying interest rates will need to be increased before inflation hits the 2% target.  The next MPC minutes on how members vote could provide some telling insight on whether Carney’s vision of a gradual trot towards higher interest rates will in fact turn into a faster gallop.”

Azad Zangana, senior European economist at Schroders, said: “Overall, the latest inflation figures show signs of a healthy economy that is enjoying the dividends from lower global commodity prices. The Bank of England has started to question how long interest rates can remain at current record-low levels, but in our view, is unlikely to hike rates before CPI inflation returns to at least 1%, which may not happen before the second quarter of 2016.”

 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Current account fraud cases double: tips to protect yourself

Cases of current account fraud almost doubled in the three months to June, according to Experian.

Close