From The BBC:
Consumer Prices Index (CPI) inflation fell slightly in January to 3%, from 3.1% in December, figures have shown.
CPI inflation has now fallen for four months in a row from a high of 5.2% in September, driven down by falls in energy costs and fuel prices.
Retail Prices Index (RPI) inflation, which includes mortgage costs and is often used in pay negotiations, fell to 0.1% from December’s 0.9%.
The drop in RPI may lead to pressure on employers to limit pay rises.
The headline RPI rate of 0.1% is the lowest rate it has been since 1960.
In addition to falling energy prices, the reduction in VAT from 17.5% to 15%, announced in the pre-Budget report in November, also had an effect.
The low level of RPI inflation could lead to some tricky wage negotiations.
“A zero or negative RPI could result in the extraordinary occurrence of average pay increases also falling towards zero,” said John Philpott at the Chartered Institute of Personnel and Development.
Leave a Reply