For goods, as opposed to services, Britain has just joined the Eurozone deflation club. This morning’s figures show that goods (i.e., the stuff we buy) were 1pc cheaper in Christmas 2014 than Christmas 2013. Factor in services and still, UK consumer price inflation was 0.5pc in December, the (joint) lowest since records began in 2004 (pdf). Pretty bad timing for Ed Miliband, who has decided to fight the election on a ‘cost of living crisis’.
And his other bête noire, the energy companies? This is from the ONS press release explaining the low inflation…
‘The main contribution to the slowdown in the inflation rate came from prices for gas and electricity… In December 2013 a number of the major utility companies raised their prices. In contrast there were no increases in December 2014.’
So energy prices have been frozen – by the market, not by a politician’s diktat. Indeed, E.ON has just announced a 3.5 per cent drop in its standard gas prices.
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