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Inflation slows to 1.2pc

Sarah Davidson

October 14, 2014

The slowdown in inflation was courtesy of falling transport costs, in particular cheaper sea and air fees.

According to the ONS if food and motor prices were excluded the inflation rate would be a third higher.

Chris Williams, chief executive officer of Wealth Horizon, said: “The ongoing fall in inflation is prompting a stay of execution for those borrowers who have been anticipating a potential rise in interest rates.

“The MPC are likely to keep a keen eye on the housing market and inflation expectations data to ensure that any hike in interest rates is not delayed too long.”

Calum Bennie, savings expert at Scottish Friendly, added: “Yet again inflation has dropped, this time by a relatively significant amount, indicating that interest rates will not rise too sharply too soon.

“According to our latest disposable income index, people currently have just 8% of their salaries left over each month after essentials are paid for.

“However, even with this drop in inflation, prices continue to rise ahead of wage increases and many could in fact feel worse off as we enter the festive season.

“Squirreling a few pounds away regularly helps build a safety net, which can be utilised when interest rates do eventually start to rise.”


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