Decline in inflation: Motoring becomes a bit cheaper but shoes are more pricey

Tuesday’s data from the Office for National Statistics (ONS) show that consumer prices increased by 2.7% in the year to February (down from 3.0% in the previous month).

The reduction in consumer price inflation can be attributed to less rapid growth in food prices, accommodation and some reductions in motor fuels. At the same time, there was some upwards pressure in terms of footwear (especially women’s).

Tuesday’s figures suggest we are seeing a trend decline towards  the Bank of England’s 2% target. This does make any increase in interest rates during the next few months less likely. Whilst we are moving back towards a position where there will be growth in real wages, that is wages adjusted for inflation, any substantial growth in real living standards is still some way off (ONS are to publish the latest UK pay growth data on Wednesday 21st).