UK inflation is continuing to fall, the Office for National Statistics has said.
Official figures released today (September 18th) revealed the Consumer Prices Index (CPI) figure for August was 2.5 per cent, down from 2.6 per cent in July.
The Retail Prices Index, which unlike CPI includes housing costs, fell from 3.2 per cent to 2.9 per cent.
A number of different factors contributed to the downward trend in inflation, with these including furniture, household equipment and maintenance, housing and household services (including gas prices), clothing and footwear.
However, the fall was constrained by the rise in transport costs, including motoring fuels.
The rise in the cost of living has slowed in all but two months since the CPI rate peaked at 5.2 per cent in September last year, although the figure remains above the government's two per cent target rate.
Wages have continued to trail inflation, so people who have been struggling to make ends meet might still be grappling with financial issues such as debt.
In such instances, action such as money management plans may be needed, or even individual voluntary arrangements in the most severe cases – such as when unpayable debts add up to more than £15,000.
Chief economist at Invesco John Greenwood said that the situation should gradually get better for consumers, stating: "We are highly unlikely to see further spikes in inflation."
The expert argued that lower inflation and a gradual rise in wages will boost consumers and in turn lead to an increase in spending.
At the moment, however, the UK is in "balance sheet repair mode" as the population seeks to cut down on its debts and increase borrowing.
Posted by Paul Thacker