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Predictions of further sharp falls ahead for inflation

Capital Economics predicts inflation will fall below the Bank of England’s target of 2 per cent this year after the consumer price index fell in February.

This week, the Office for National Statistics said inflation fell from 3.6 per cent in January to 3.4 per cent last month following downward pressure from domestic energy, recreation and culture and transport. Inflation has fallen markedly since its high of 5.2 per cent in September 2011 but still remains well above the BoE’s 2 per cent target.

CE chief UK economist Vicky Redwood says: “Inflation is still likely to fall sharply in the second half of the year as last year’s rises in utility prices stop boosting the annual comparison and lower cotton prices pull down clothing inflation. The fundamental drivers of inflation remain very weak. Most notably, pay growth dropped to just 1 per cent in January. We think inflation will be below 2 per cent by the end of the year and fall to just 1 per cent or so in 2013.”

Churchouse Financial Planning director Keith Churchouse says: “Inflation could fall to below 2 per cent at the end of the year because there has been a general slowing of the economy and consumer spending.”


F&C outflows reach £7bn as firm looks to cut costs

F&C Asset Management saw £7.2bn of outflows last year. The company’s annual results, published last week, show assets under management fell by 5.4 per cent from £105.8bn in 2010 to £100.1bn in 2011 but profit increased by 7.8 per cent from £38.3m to £41.3m. In March 2010, F&C said it would conduct a strategic review […]


Budget 12: What to expect from today’s Budget

This afternoon, the Chancellor will deliver his third Budget. With much of the direction of travel set out in previous fiscal set pieces, and a fair bit of leaking ahead of the big event, it is not expected to contain many surprises. Here is a round-up of what you can expect to hear as Osborne […]


Budget 12: State pension to be linked to life expectancy

Chancellor George Osborne has confirmed future increases in the state pension age will be linked to life expectancy. Speaking to Parliament today as part of the Budget, Osborne (pictured) said details of how the “automatic review” system will work will be published in the summer. He said: “I’ve also said that we would consider proposals […]

Hard look at issue of footprints

The FSA is looking at lenders’ use of hard footprints when checking potential borrowers’ credit records. The majority of lenders now use hard footprints when checking credit, which many claim can be damaging as it can be seen by other lenders. When soft footprints are used, only the lender and borrower can see the search. […]

Responsibility Matters

The latest update from the Sustainable Investments Team at Royal London Asset Management, Responsibility Matters, is now available. In this edition the team look at issues such as the growing acceptance of sustainable investing and technology in China. Read the update here: The value of investments and the income from them is not guaranteed and […]


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