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Inflation remains negative for second month

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Inflation has remained at -0.1 per cent for the second month in a row, according to figures from the Office for National Statistics.

It comes after inflation turned negative last month, and marks the first time that consumer prices have fallen on an annual basis for two months in a row.

The ONS said that climbing prices in clothing, footwear and recreational goods were offset by dips in the cost of university tuition fees, food, alcohol and tobacco, resulting in no change to the overall rate of inflation from last month.

Hargreaves Lansdown senior analyst Laith Khalaf says: “Inflation still remains well below target, with lower food and fuel prices continuing to weigh down the headline Consumer Price Index. Core inflation is likewise weak, so savers are unlikely to get an early Christmas present from the Bank of England following its next policy meeting in early December.

“The market now expects a rate rise in the UK in the summer of 2016, however such forecasts have been chasing the pot of gold at the end of the rainbow for more than six years now.”

Deloitte chief economist Ian Stewart says: “This reduction in prices, combined with rising real incomes and ultra-low interest rates, should help the UK recovery plough on despite the headwinds from emerging markets.”

A Bank of England report warned earlier this month that inflation is expected to remain below one per cent until at least the second half of next year, citing weakening in the global economy.

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