Tuesday, March 20, 2012
Inflation falling, but one or two doubts
Posted by David Smith at 11:30 AM
Category: Thoughts and responses

Inflation fell to 3.4% in February, from 3.6% in January. This was the lowest since November 2010 and, according to the Office for National Statistics, "the largest downward pressures to the change in CPI annual inflation between January and February came from domestic electricity and gas, recreation & culture and transport".

RPI inflation, meanwhile, dropped from 3.9% to 3.7%, its lowest since February 2010, with "the largest downward pressures from motoring expenditure and fuel & light". These are welcome falls and suggest that the high-inflation nightmare of 2011 is starting to come to an end. The release is here.

It is not, however, all plain sailing. The CBI, in a generally strong industrial trends survey, here, says production is picking up but inflationary pressures are rising, which is blames on a higher oil price. Oil, to mix metaphors, could still be a spanner in the works.