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Record inflation fall

 

Inflation falls


Inflation fell at a record pace in October to 4.5%, as oil, transport and food prices fell. The Consumer Price Index (CPI) fell from a 16 year peak of 5.2%, which was reached in September, to the lowest rate since July. The Retail Price Index (RPI), an alternative measure of inflation that includes house prices, fell from 5% to 4.2% marking the biggest fall since 2003.

The large fall in inflation helps to explain the dramatic 1.5% interest rate cut that occurred earlier this month.

The Bank of England has forecasted further decline of inflation, expecting it to fall below the target of 2% next year, with the possibility it might drop as low as 1%.

David Kern, the chief economist at the Chambers of Commerce has predicted that in light of these figures there will be a further fall in interest rates.

Further job cuts


The US bank Citigroup announces yesterday that it plans for a further 52,000 job cuts, on top of the 23,000 already made this year. This reduction in jobs represents a 20% cut in their worldwide workforce. Despite the biggest cuts being in the United States, the UK will also suffer, with Citigroup employing thousands of investment bankers in London, 1,800 staff in Derby who work for the Egg credit card company that it also runs and a large administrative division in Belfast.

This proposed cut in headcount at Citigroup marks the largest cut seen so far, but further job cuts are expected across the whole financial service industry.

Job cuts are also being seen across other industries, with Wolseley, a plumbing and materials firm announcing a cut of 2,300 more jobs and close more than 200 branches.

Rent prices fall


The Royal Institute of Chartered Surveyors (Rics) has discovered that due to the increasing number of unsellable homes, rent prices have been forced down as homeowners have resorted to renting their properties.

Rent prices in London and the Southeast were the worst hit.

Energy firms pressured to drop fuel costs


Oil prices dropped to a two year low yesterday, sparking further pressure on energy firms to lower domestic energy bills. The first round of cuts - expected to reduce annual bills by £100 - is expected to be as soon as January. However, political pressure is urging energy firms to act sooner as consumers are struggling to cope with rising household bills and large job cuts.

 

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