Evidence of No UK Increase in Rate of Inflation in July 2009
After the Bank of England's latest push in quantitative easing, the prospect that the UK may see a significant amount of inflation is certainly at the
forefront of many people's minds - with critics such as The Telegraph's Alex Singleton describing the move as 'no good for growth'. However, despite
such projections, the latest data from The Office of National Statistics shows that there was no evidence of an increase in the rate of inflation over the
month of July. But how does this affect savers and spenders?
The Consumer Prices Index (CPI) as published by the Office for National Statistics showed that at the end of July inflation remained at 1.8 percent, as
it had done at the end of June. Consequently, whilst those of us who are looking for the best savings rates may well be deterred by the low interest
advertised at a majority of banks and building societies, this consistent rate of inflation will no doubt prove to be a very good thing - and may prompt
many to start saving.
This is an opinion that is up held by financial analyst at Moneyfacts, Louise Holmes. "Banks and building societies appear to be redeeming themselves
on the savings front," she said. "Savers, who have suffered as of late with poor rates, may be wise to take advantage of the current situation." This is
because, when compared to a time of high rates and faster inflation, the actual returns on saving will be less. Yet during economic times such as those
felt now, with lower rates and slower inflation, the actual return is higher.
However, a recent report by the Daily Mail highlights that this slow rate of inflation is not a good thing for everyone - particularly those who can't afford
to save, and must spend a considerable amount of their money on groceries. This is because, according to The Mail and figures published by
MySupermarket.co.uk, supermarket bills have increased by 4.4 percent over the last year - a rate that is way out of correlation with UK inflation.
The Mail described