Tuesday, June 15, 2010
Inflation dips to 3.4%
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

Good news on inflation - for once better than expected, with consumer price inflatrion dropping from 3.7% to 3.4%, RPI inflation from 5.3% to 5.1% and RPIX inflation from 5.4% to 5.1%. The timing of the budget helped - last year saw the budget excise duty increases coming through in May - but these numbers, while still far too high for comfort, will have proved a bit of relief for the monetary policy committee (MPC).

Looking at some of the other measures, consumer price inflation excluding indirect taxes fell from 2% to 1.7%, while consumer price inflation at constant tax rates fell from 1.9% to 1.6%. Goods price inflation and service sector inflation were identical at 3.4%, the first time we have had that for a while. More here.

RICS (the Royal Institution of Chartered Surveyors) said the abolition of home information packs had increased the supply of new properties coming on to the market, but the balance of surveyors reporting higher prices rose from 19% to 22%. The official DCLG measure of house prices rose by 0.4% in April, after 0.7% in March, 10.1% up on the year. But the Council of Mortgage Lenders said the proportion of first-time buyers has dropped to just 35%, the lowest since 2007.