Inflation shows decline for July
THE rate of inflation declined to 1.6% for the year to July 2014, latest figures from the Office for National Statistics have shown.
The Consumer Prices Index (CPI) was down 0.3% on the rate of 1.9% in June.
The rate benefitted from falls in clothing prices – the largest downward contributor – alcohol, financial services and food & non-alcoholic drinks.
The largest upward contributor, which partially offset the reduction, was from the transport group.
CPIH, which includes owner occupiers’ housing costs, was 1.5% in the year to July 2014, down from 1.8% in June. RPI declined to 1.8%, down from 2.0% in June.
Business leaders in Greater Birmingham welcomed the fall.
Tim Pile, President of Birmingham Chamber of Commerce, said: “Today’s announcement is positive news. The chamber’s latest Quarterly Economic Survey for Q2 2014 reveals that only 29% of manufacturers believe their prices will rise in coming months. This compares to 41% in Q1 2014. So today’s announcement helps to confirm that businesses have a more optimistic view.
“While the inflation rate is still below the 2% target set by the Bank it is important that this doesn’t cause a knee-jerk reaction in interest rates. The recovery is improving in Greater Birmingham but we must not take this for granted.”
