Inflation falls back to 5%

CPI inflation has made a move in the right direction by falling back to 5 per cent from 5.2 per cent in October.

The price of food was responsible for the fall according to the Office for National Statistics, as widespread discounting by supermarkets, and good harvests drove prices down.

Figures from the British Retail Consortium (BRC) also show this, with figures that show food was 0.5 per cent cheaper in October than in September – the biggest month on month drop since in more than two years.

Commenting, director general of the BRC Stephen Robertson said: “With consumers’ budgets under severe pressure, competition between retailers has intensified. Supermarkets are cutting their already thin margins even further to hold down shop prices in the face of rising energy and property costs.

“Inflation is not coming from shops but from utility, fuel and insurance bills. The retail sector is doing its bit to support households. We need the Chancellor to hold down the costs he is responsible for by scrapping the fuel duty increases planned for 2012 and restricting business rates rises.”