Interest rates: no need for rise

20 August 2014

British high street Thanks to supermarket price wars and sales on the high street this summer, there's been no need for the Bank of England to go ahead with early interest rate rises. Hurrah!

The consumer prices index, or CPI, went from 1.9% to 1.6% last month, which means it is still below the Bank's 2% target for the seventh month on the trot.

The Office for National Statistics reckon this is down to a third month of falling food costs, which is due to the supermarkets scrambling for what customers they can get with all manner of discounts and offers.

The July RPI figure, which they use to set next year’s regulated rail fares, came in at 2.5%, which hopefully is good news for commuters expecting a massive price increase in the new year.

The City was a bit freaked out by the drop in CPI. Experts said the lack of evidence of inflation would stay the hand of the Monetary Policy Committee from a first rate since 2007.

There'll no doubt be more exciting news like that when the Bank publishes the minutes of its August meeting, but otherwise that's all quite optimistic news isn't it?

Please say it is.

TOPICS:   Banking   Investments   Economy

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