The UK inflation rate falls to 0.3%
A member of the UK200Group of independent chartered accountancy and law firms has today commented on news that the UK’s inflation rate, as measured by the Consumer Prices Index, fell to 0.3% in April, according to the Office for National Statistics (ONS). The fall, from March’s rate of 0.5%, is the first since September. “Falls in air fares and prices for clothing, vehicles and social housing rent” were the main reasons for the drop in the rate, the ONS said. The Bank of England said last week that it expected inflation to increase in the second half of the year.
Jonathan Russell, partner, at UK200Group member firm ReesRussell, said:
“It is no great surprise to those of us dealing with small businesses that inflation and trade has slowed as we have been hearing this for many months now. Brexit is not really a factor but the whole World economy is. In simple terms the consumer has no money to spend and governments equally are try to cut back (possibly with the exception of the EU) and therefore demand for goods and services are not growing which means businesses will also not invest. There is no quick fix because for things to move there has to be spending, those employed are not seeing any increase in wages and any increase is being absorbed by basic goods increasing in price; Government has spent all it can afford and is pulling in its horns and the banking industry is not prepared to lend any money because it is already over exposed. This means we have a long slog back to make up for our past excesses and it is more likely the next interest rate move will be down not up.”