Inflation predicted to 'fall sharply'
News Category: Industry News
Published: 17-Oct-2008
This article was brought to you by Rentman the premium property management system.
Both landlords and tenants might welcome the loosening of inflationary pressures on their outgoings in the next 12 months.
After hitting 5.2 per cent this week, consumer prices index (CPI) inflation could fall "very sharply over the next year or so", said Jonathon Loynes, chief European economist at Capital Economics.
He claimed that CPI rates have reached their peak and will now begin to decline as food and oil prices begin to ease.
"It is partly because the forces that have been pushing it up over the last year or so are going into reverse," Mr Loynes said.
Food represented a downward pressure on CPI figures for September, but increasing gas and electricity prices helped drive inflation up to 5.2 per cent.
The government's target rate for CPI inflation is two per cent and each time it rises above or below this target by a difference of one per cent, Bank of England governor Mervyn King has to write a letter of explanation to the chancellor.
Find out more about letting agency software.
