Recent inflation figures!

Once again, the new inflation figures have come out for November and the CPI has fallen 0.2% from the previous month. The RPI also fell from 5.4% to 5.2%.
Reasons for the slight fall in inflation include:

• Supermarket food prices (bread and vegetables) - price war
• Transport costs - fuel prices fell

However, the rate at which prices are rising is still twice that of the rate of increase of wages, making society worse off. Wage rises are not keeping up with inflation, thus in real terms, salaries are falling.

Word of the Day

Inflation

A continuous rise in the average price level. Measured by the Retail Price Index (RPI) and the Consumer Price Index (CPI). The RPI contains mortgage interest payments thus it is always larger than the CPI. Usually inflation is measured by the CPI. In the UK, the current rate of inflation is 4.5% (June) while the Bank of England's target rate of inflation is 2%.