A spring in Osborne's step: Inflation falls again

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Inflation: As low as 2009
Inflation: As low as 2009, when the fin

There was a rare glimmer of good news for consumers today, when official figures put inflation at its lowest level since 2009.

The Office of National Statistics (ONS) found consumer price inflation eased to 2.2% in September, down from 2.5% in August.

The news will have put a spring in the step of George Osborne, as it suggests the benefits bill for next year will be slightly down on the Office for Budget Responsibility (OBR) forecast, which used a consumer price index of 2.6%. Under that calculation, the benefits bill would come in at £183 billion.

Benefits claimants, however, will suffer from the drop, because last month's inflation numbers will be used to set the payout amount.


The fall may also nudge consumer spending to higher levels and boost demand, but observers were only cautiously optimistic about the figures' impact on the wider economy.

Significant rises in energy bills last September may drive up inflation again later this year, a process which will be repeated when the big four companies raise prices by six to nine per cent.

Cathy Jamieson, shadow Treasury minister, said: "This fall in the inflation rate is welcome, but families and pensioners will face a real squeeze from big hikes in energy and food prices in the coming months."

Rising food prices and the introduction of tuition fees are also expected to have an impact.

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