UK inflation at lowest rate in five years
The rate of inflation faced by households in the UK has slowed for September, according to the Consumer Prices Index, standing at 1.2% in the year to September 2014, compared with 1.5% in August.
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The ONS attributes the slowdown to falls in transport costs and the prices of a range of recreational goods.
The ONS also highlighted the impact of soaring rent and utility bills, adding that prices for housing and household services have been the main contributor to the rate of inflation, accounting for a third of the rate. In other words, the rate of inflation would have been 0.8% in September 2014 were these rises in prices excluded.
September's figure is the lowest rate of inflation since September 2009, when it fell to 1.1%
TUC General Secretary Frances O’Grady said:
“Seven years of falling real wages has left demand weak and the economic recovery looking increasingly fragile. New concerns about deflation are emerging.
“Today’s figures should put an end to speculation about early interest rate rises – it’s wage rises that the economy desperately needs.
“As Bank of England Governor Mark Carney told the TUC last month, British workers have faced pay cuts deeper than at any time since the 1920s. Today’s figures show the economic costs of shutting working people out of the recovery.”
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