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17/01/2012
Inflation Down In December
The Chancellor has breathed a sigh of relief as it emerges the two main measures of the UK's inflation rate both fell in December last year.
The Consumer Price Index now stands at 4.2% for December last year, down from 4.8% in November. Meanwhile, the Retail Price Index stands at 4.8% for the same period, down from 5.2% in November.
According to the Office of National Statistics (ONS), the last time there was a larger fall in annual inflation was between November and December 2008.
The largest downward pressures to the change in CPI annual inflation between November and December 2011 came from petrol, gas and clothing.
The news comes as political uncertainty in the Eurozone paralysed the UK recovery, according to the latest quarterly forecast from the Ernst & Young, with UK GDP expected to flatline for the rest of year.
In their winter forecast Ernst & Young said deteriorating levels of confidence would see business investment stagnate in 2012, whilst export prospects have already slowed. According to the report, the UK is probably already in a technical recession and will struggle to reach positive growth until 2013.
The report forecasts UK GDP of 0.2% this year before increasing to 1.8% in 2013 and 2.8% in 2014.
Professor Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club said: "Figures for the last quarter of 2011 and the first quarter of this year are likely to show that we are back in recession and we are going to have to wait until this summer before there are any signs of improvement. But it’s not going to be a repeat of 2009; we are not going to see a serious double dip."
(DW)
The Consumer Price Index now stands at 4.2% for December last year, down from 4.8% in November. Meanwhile, the Retail Price Index stands at 4.8% for the same period, down from 5.2% in November.
According to the Office of National Statistics (ONS), the last time there was a larger fall in annual inflation was between November and December 2008.
The largest downward pressures to the change in CPI annual inflation between November and December 2011 came from petrol, gas and clothing.
The news comes as political uncertainty in the Eurozone paralysed the UK recovery, according to the latest quarterly forecast from the Ernst & Young, with UK GDP expected to flatline for the rest of year.
In their winter forecast Ernst & Young said deteriorating levels of confidence would see business investment stagnate in 2012, whilst export prospects have already slowed. According to the report, the UK is probably already in a technical recession and will struggle to reach positive growth until 2013.
The report forecasts UK GDP of 0.2% this year before increasing to 1.8% in 2013 and 2.8% in 2014.
Professor Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club said: "Figures for the last quarter of 2011 and the first quarter of this year are likely to show that we are back in recession and we are going to have to wait until this summer before there are any signs of improvement. But it’s not going to be a repeat of 2009; we are not going to see a serious double dip."
(DW)
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