Inflation continues downward trend

INFLATION continued to fall last month, dipping a further 0.1% to 2.7%, according to official figures.

The Office for National Statistics said the largest contributions to the fall came from transport, particularly motor fuels and air transport, and clothing.

These were partially offset by an upward contribution from furniture, household equipment and maintenance.

The ONS said the latest numbers continue the trend of broadly steady inflation seen since spring 2012. It fell 0.1% to 2.8% in July.

Ian O’Donnell, Warwickshire & Coventry chairman, Federation of Small Businesses, said: “The fall in the CPI rate of inflation will be welcome by businesses, especially as much of the decrease was due to a fall in the price of fuel. However the rise in the RPI rate of inflation August will cause much concern among businesses as next month’s RPI figure will determine the size of business rate increases in 2014.

“Last year the Government agreed to review the inconsistent use of RPI which traditionally results in higher business rates bills for businesses, and the FSB would like the Government to fulfil this commitment as a matter of urgency.”