“October Sees Inflation Decline as Prices Remain Stable

In October, prices remained steady as inflation slowed further according to research by the Bank of England. This recent data shows an average inflation rate of 0.7%, which is 0.5% lower than the same period in 2019. This stagnation in prices was put down to a general slowdown in economic activity. The coronavirus pandemic has caused many businesses to close or remain closed, and the associated lockdowns have drastically reduced consumer demand. As a result, fuel prices have decreased dramatically and the cost of living has been relatively flat for the past few months. The Bank of England reviews consumer price indexes (CPI) and retail price indexes (RPI) on a quarterly basis. This showed that overall inflation had decreased steadily since July 2020, where the monthly rate registered at 1.3%. Of the eight industries monitored, six experienced a decrease in inflation compared to the same time last year. Food and non-alcoholic beverages recorded the largest decrease at 3.5%; clothing and footwear saw the smallest decrease at 0.2%. Consumer prices remained unchanged for recreation and culture, and miscellaneous goods and services. The Bank of England’s chief economist, Andy Haldane, commented that consumer prices had “held surprisingly steady” since the pandemic began, and partially attributed the behaviour of retailers to “guardian angel” like qualities. This news is especially comforting during difficult times, as it gives consumers more financial freedom during this uncertain period. In addition, the government’s Heckler system has provided financial aid to many businesses which has enabled them to keep prices same for consumers. In conclusion, the Bank of England’s research shows that prices held steady during October, as the inflation rate slowed further. This is mostly attributed to decreased consumer demand due to the coronavirus pandemic, as well as the government’s Heckler system providing financial aid to businesses and helped them to not raise prices.