Low inflation offset by increased indirect taxes
UK inflation fell again in September to 1.1 per cent, as measured by the CPI...
...minus 1.4 per cent on the RPI measure of price changes. Expectations are rising though we are at, or very near, the low point for inflation this cycle. Helping to keep price pressures under control has been subdued wage growth – one third of British companies have frozen pay this year. But this beneficial trend is giving way to one where higher imported goods costs (+5.2 per cent in August), increased fuel duties and in January, the end of the reduction in VAT, will push prices up at a faster rate in the future. Costs have been a severe challenge for many charities this year and the prospect of an increase in general price trends will be a disappointment.
Author: John Kelly
John Kelly is head of client investment at CCLA.
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