Skip to Content

Coffee House

Inflation falls again

15 April 2014

10:06 AM

15 April 2014

10:06 AM

Wages in the private sector are now rising faster than inflation. The latest CPI inflation figures show that it now down to 1.6 per cent, comfortably below the Bank of England’s 2 per cent target. This is the sixth time in a row where inflation has fallen. An interest rate rise this side of the election is becoming ever more unlikely.

Tomorrow, the Office for National Statistics provides it figures for average wage growth in the last three month. This is expected to show that wages are now increasing faster than prices, easing the cost of living squeeze. Labour argues that the cost of living crisis is about far more than this. But there’s no doubt that if this trend continues between now and May 2015, people will feel better off on polling day than they do today.

UPDATE FROM FRASER: The earnings recovery has begun, but it’s expected to be slow (which partly explains the rise in job numbers – folk are still being paid significantly less than before the crash). The below graph, using OBR forecasts, shows just how long it will be before the average Brit is as well-paid as before the crash:-

Screen Shot 2014-04-15 at 12.56.21

Show comments


Please read our Comment Policy before commenting.