Inflation falls lower

The consumer prices index (CPI) measurement of inflation has fallen further, it has been revealed.

Figures from the Office for National Statistics showed that the rate dropped from 1.8 per cent in July to 1.6 per cent in August.

This compares with the two per cent target rate set by the chancellor of the exchequer for the Bank of England to maintain.

At the same time, the retail price index – which includes mortgage payments – showed a deflation rate of 1.3 per cent.

Such a low rate may help keep the Bank’s base rate low in the months to come, something that could help those looking for the best credit card deal.

Speaking before the Treasury Select Committee in the House of Commons, Bank of England governor Mervyn King said today (September 15th) that the CPI rate is likely to fall further in the next six months, after which it will be “volatile”.

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