Inflation falls to new low

INFLATION fell to a new low of 0% in the year to February, official figures showed today.
 
Last month’s fall in the CPI rate – from 0.3% in January – represents a record low.
 
Data released by the Office for National Statistics shows the main contributions to the slowdown in the rate came from price movements for a range of recreational goods (particularly data processing equipment, books and games, toys & hobbies), food and furniture & furnishings.

The ONS said that in the year to February 2015, food prices fell by 3.4% and prices of motor fuels fell by 16.6%. This continues the downward trend in the price movements in these product groups, with prices falling or remaining unchanged on the year for 10 and 18 consecutive months respectively.

The food and motor fuels groups in total reduced the CPI 12-month rate by approximately 0.9 percentage points.

Speaking after the announcement, Greater Birmingham Chamber of Commerce renewed an appeal for more investment in business in order boost economic growth.

Chamber president Greg Lowson said the zero rate was a sign of low demand but warned against any knee-jerk reactions in terms of policy.

He said: “The inflation rate continues a record-breaking trend, which indicates continued low demand in the economy. 

“It is important to realise in addition, that oil price reductions have had a key part to play in reducing inflation. This will not continue in the long-term and so policy must not be changed on the basis of this. 

“It reminds us importantly that more needs to be done to promote business investment and achieve better balanced growth.”