Abacus Daily Debt News

Inflation falls in March

Retail prices index inflation – which takes home loan repayments into account – has fallen below zero for the first time since 1960, the Office for National Statistics has revealed.

The figure went into negative territory in March, partly because of a drop in the level of interest payments made by mortgage borrowers - a result of the recent Bank of England base rate cuts.

In addition, consumer prices index inflation – which includes items such as household services – dropped to 2.9 per cent during the month, with gas bills being a large downward pressure on this.

Fuel and transport costs, as well as lower prices for food and drinks, also had an effect on the figures as they were cheaper than levels seen a year ago.

However, the Alliance Trust reported that elderly people are still struggling with higher rates of inflation than the young, with food prices being a factor.

But older groups are beginning to benefit from reductions in gas and electricity costs, albeit slowly, the organisation noted.

By Jamie Price