Inflation remains unchanged at 0.3%

CPI rose by 0.3% in the year to May 2016, unchanged from April, according to the latest ONS statistics.

Related topics:  Finance News
Rozi Jones
14th June 2016
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"The under-30s are facing a double-whammy. Prices are rising faster in areas where they spend more, and rising slower in areas where they spend less."

In April, CPI fell to 0.3% from 0.5% in the year to March - the first fall since September 2015.

With the exception of March, which the ONS says was "when the rate was influenced by the timing of Easter", headline inflation has been 0.3% for all months of 2016.

Rises in transport costs, restaurant and hotel bills and the price of telecommunication services were the main upward contributors to change in the rate last month.

However these upward pressures were offset by falls in the price of clothing, food and games, toys and hobbies.

CPIH (which includes owner occupiers’ housing costs) rose by 0.7% in the year to May 2016, up from 0.6% in April.

However in response to inflation remaining below the government's target of 2% for 29 months, Aviva data shows that young people are being hit by "hidden" price rises.

It found that in areas where under-30s spend more – such as housing, education and restaurants - prices have been rising faster than the headline average. Meanwhile, in areas where the under-30s spend less – such as food, transport and recreation – prices have been rising slower than the headline average, or even falling.
 
Alistair McQueen, Savings & Retirement Manager at Aviva, said: “The under-30s are facing a double-whammy. Prices are rising faster in areas where they spend more, and rising slower in areas where they spend less. These underlying differences are often hidden when we plan our finances. Price movements are outside anyone’s direct control, but this does not mean we are powerless to act."

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