UK price cuts trigger inflation fall
Source: BI-ME with UKPA , Author: Posted by BI-ME staff
Posted: Tue January 17, 2012 12:53 pm

INTERNATIONAL. A raft of high-street promotions in the run-up to Christmas triggered the largest drop in inflation in nearly three years.

Consumer prices index (CPI) inflation dropped to 4.2% in December from 4.8% in November, the Office for National Statistics (ONS) said, equal to the decline between March and April 2009.

The drop was driven by a 2.8% plunge in the price of clothing and footwear as retailers slashed prices to pull in more customers in the run-up to Christmas.

But there was less evidence than expected of the impact of the supermarket price war started in early October, as food prices rose by 1.4% month on month.

The drop in the rate of inflation in December underlines the easing pressure on households after a sustained period of high prices and slow wage growth.

The Bank of England in its last inflation report, in November, said that it expected the rate of inflation to fall back gradually through 2012 before possibly undershooting the Government's 2% target next year.

The increase in the cost of living is expected to slow further as the economy grinds to a halt and unemployment soars towards the three million mark.

December's figures and any further slowdown in inflation will support the argument in favour of holding interest rates at record lows of 0.5% and injecting billions of pounds into the Bank's quantitative easing programme.

Elsewhere, the ONS said downward pressure came from fuel prices, which dropped 0.6%, and alcoholic drinks, which fell 1.5% between November and December.

The fall in clothing prices was driven by a wide range of garments, with a particularly large drop in women's outerwear, the ONS said.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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QATAR. The turmoil in financial markets at the beginning of this year has prompted some to question whether the US Federal Reserve should have increased interest rates in December.
date:Posted: February 13, 2016
KUWAIT. Kuwait has built up very large fiscal and external net asset positions over many years, which will continue to help it weather the current low oil price environment; The overall fiscal and external balance sheets will remain strong, backed by a significant stock of financial assets.
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INTERNATIONAL. A Syria in which the regime and IS, rather than other rebel groups, are the only real domestic players turns Bashar al-Assad into a pivotal cog in the fight against jihadism. That is something Saudi Arabia cannot allow to happen. To turn the tide, it needs a United States that is engaged and willing to do its bit.
KUWAIT. Kuwait has built up very large fiscal and external net asset positions over many years, which will continue to help it weather the current low oil price environment; The overall fiscal and external balance sheets will remain strong, backed by a significant stock of financial assets.
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