Inflation continues downward trend

INFLATION has fallen to a 31-month low, according to new figures.

The headline rate of inflation fell to 2.4% in June compared to 2.8% in May.

The consumer prices index is now at its lowest level since November 2009 when it was at 1.9%.

Falls in clothing and footwear, transport and costs were the largest downward pressures according to the Office for National Statistics.

The retail prices index measure, which includes housing costs, fell from 3.1% to 2.8% in June.

Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce, said: “Inflation continues to ease as highlighted by today’s official release showing that the Retail Prices Index is now 2.8% and the Consumer Prices Index is now 2.4%.

“Consumers continue to be squeezed by inflation, but that is easing, and falling fuel prices will be welcomed by both businesses and consumers.

“Heavy discounting by retailers is also helping to keep inflation down, along with commodity prices easing price pressures for businesses. The figures reveal that the main factors behind the easing of the Consumer Prices Index are retailers’ summer sales beginning earlier than usual with discounting of clothing and footwear.

“Food and drink prices have eased over the past month, though there is a risk that food inflation could pick up because of the adverse weather affecting crop yields.”

He added that he expected inflation to continue to ease for the rest of the year.