Inflation down: and yes, we have some (cheaper) bananas

This morning’s figures from the Office for National Statistics (ONS) indicate a further, welcome reduction in the inflation rate, according to business advisors, PwC.

ONS data on the consumer price index (CPI) suggests that inflation in May was 2.8%, down from 3% in April.

PwC’s chief economist in Scotland and Northern Ireland, Dr. Esmond Birnie, says that the Retail Price Index (RPI) rate fell by an even greater amount, offering some slightly better economic news:

“Key drivers of today’s news seem to be falling global prices impacting on UK consumers.

“Declining oil prices are beginning to feed through into petrol and diesel prices at the pumps, retailers are engaged in some aggressive price cutting and even the cost of some fruit and vegetables have fallen sharply, thanks to a bumper harvest.

“Whilst inflation remains above the Bank of England's 2% target, today’s data could be significant on a couple of fronts.

“First, the Monetary Policy Committee may judge that it gives them more room for manoeuvre for possibly introducing further Quantitative Easing.

“And second, anything which reduces the previously severe squeeze on household disposable incomes might stir a revival in consumer spending and hence turn the economy to a more general and durable recovery".

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