September 18 2014 Latest news:

Inflation has hit a 15-month low – but the news has come amid fears that its fall may be slowed by raising oil prices.

To send a link to this page to a friend, you must be logged in.

The consumer prices index (CPI) measure of inflation fell to 3.4pc last month from 3.6pc in January, with lower domestic energy bills responsible for much of that drop.

But the rate remains substantially above the government’s target of 2pc, and there are fresh concerns that pressure on oil prices will slow the progress being made.

Scottish Power reduced tariffs by an average of 5pc for its gas customers last month, after rival Eon announced a 6pc fall in electricity bills.

There was also a fall in the price of air fares, which were down 1.6pc, according to the Office for National Statistics.

Despite the concerns over the future inflationary landscape, every fall is good news for savers, who have been badly clobbered over the past few years thanks to the potent mix of tax, high inflation and low interest rates.

“This is the fifth month in a row that CPI has fallen, and logic says that it must be easing some of the misery savers have suffered due to a combination of high inflation and the low savings interest rates over the past three years,” said Moneyfacts spokesman Sylvia Waycot.

“However, it’s just a bit too early for everyone to burst into a chorus of Don’t Worry, Be Happy, as today’s figures still mean that there are only 79 accounts out of 1,126 that negate both inflation and the taxman’s cut.

“Today’s accounts favour short-term bonuses which mask the lower rate that is applied on first anniversaries. Savers need to keep on top of their savings by reviewing the market annually.”

The latest CPI figure means basic-rate taxpayers still need to earn interest of 4.25pc before enjoying a real rate of return on their savings. The average no-notice savings account pays just 0.98pc.

Thomas Paterson, chief economist at Gold Made Simple, was downbeat about the outlook for the rest of 2012.

“This is now the 27th month in a row that the Bank of England has failed to get anywhere near its government-mandated target of 2pc, and the chances of reaching that target by the end of the year seem more and more remote,” he said.

Latest London news

0 comments

London Bloggers

Yesterday, 14:16
The cast, including Josie Lawrence and Mike Myers

Simon Collins catches up with the improv impresarios, who despite being the world’s longest-running comedy show with the same cast, have lost none of the razor-sharp wit:

Monday, September 1, 2014
Do you really need an explanation for that?! (Pic by Serena Marinelli)

If you’ve ever seen an Italian movie, you would probably know how important body language is in the culture.

Tuesday, August 26, 2014
Don't waste any of your harvest

If you are now inundated with ripe tomatoes, juicy green beans, berries and herbs, don’t leave them to go stringy or mouldy because the freezer can go a long way to making your crops last well into winter.

Quizzes

Other articles

LDN24 Promotions

Imagine having your own idyllic house in the French countryside - and make it happen! [Photograph by Mike Simler]

Make your Gallic dream a reality at the French Property Exhibition

Ever dreamed of living in a rural cottage in France with ivy round the door, chickens in your garden, and fresh croissants for breakfast from the local patisserie a short walk away in the nearby village?

Read full story »

Advanced running and training technology for beginners up to elite athletes

Thinking of getting a treadmill to lose weight?

If you’re thinking of adding running treadmill to your fitness routine, you’re on the right track! There are several advantages to running on a treadmill versus running outdoors.

Read full story »