And interest rate to remain
Inflation hits zero percent again in August 2015, according to the Office for National Statistics (ONS), down from 0.1 percent in July. This is due to falling oil prices, which is reported to be the lowest since 2009, affecting the cost of everyday goods, which determine inflation. What does this mean for UK consumers and the potential interest rate rise?
Low inflation should help economy
Inflation is measured by the Consumer Price Index (CPI) which tracks the cost of everyday items, rise and fall largely determined by oil prices. Core inflation excludes items that frequently fluctuate.
Both CPI and Core inflation have fallen again. Economists are viewing this as positive in helping to sustain economic recovery and continued growth by boosting disposable income.
“Low inflation supports living standards by boosting disposable income” British Chambers of Commerce economist, David Kern
With inflation at zero, the Bank of England (BoE) are under no pressure to increase the interest rate.
Interest rate remains 0.5% for 78th month
The Monetary Policy Committee (MPC) agreed by majority vote to retain the 0.5% interest rate again, for the 78th consecutive month.
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