Inflation fall may help consumers in debt

Consumers struggling with debt repayments may find they have the strain on their finances eased by the latest fall in the Consumer Prices Index (CPI) rate of inflation.

The CPI rate dipped from 2.5 per cent in August to 2.2 per cent in September, the lowest level since it was 1.9 per cent in November 2009.

At the same time the Retail Prices Index figure fell from 2.9 per cent to 2.6 per cent.

However, one of the key factors identified by the Office for National Statistics as influencing the fall was the dropping out of the calculation of the 2011 utility price hikes.

This particular aspect of the cost of living has been more favourable in the past year, with slight price falls in early 2012, but the past week has seen three energy firms – British Gas, nPower and Scottish Power – announcing price hikes.

Scottish and Southern Electric had already unveiled price increases, which are coming into effect this month.

The moves may not just push up inflation, but do so in a way that hits hard at poorer consumers.

By Joe White