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15 April 2014

UK inflation below Bank of England target for third consecutive month

UK inflation fell again in March to 1.6% and below February’s a four-year low of 1.7%, according to today’s official figures from the Office for National Statistics (ONS).

This is the third consecutive month that Consumer Prices Index (CPI) inflation has remained beneath the Bank of England's 2% target and CPI inflation is now at its lowest since October 2009.

It’s also the sixth consecutive month that the overall rate of inflation has fallen, the longest consecutive fall in 17 years.

Dr Esmond Birnie, chief economist with PwC in Northern Ireland says it’s another day of welcome economic data that helps define the extent of recovery.

“The gap between inflation and average wage increases continues to close and is now at its narrowest since April 2010.

“However, average earnings data due tomorrow (Wednesday), are expected to show that UK average weekly earnings are finally edging ahead of inflation for the first time since 2008.

 “The big drivers of reduced inflation in March were falling petrol and diesel costs and a slowdown in the cost of clothing and furniture relative to last year.

“Tomorrow also brings unemployment data and if this falls and wages finally outstrip inflation, that will be a major landmark for Northern Ireland relieving some of the pressure on household budgets.

“This series of economic good news stories is welcome, but we should not forget that Northern Ireland is recovering more slowly than the other 11 regions and we have a steeper hill to climb.

“Nonetheless, another month of falling inflation helps underpin the UK and local recovery.”

Ends.

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