5% INFLATION By: Clare

The Consumer Prices Index (CPI) fell to 5% in October. This is down from a rate of 5.2% in September, and is as a result of drops in the prices of food, fuel and air transport.

The Retail Prices Index (RPI), which includes mortgage interest, also fell from 5.6% to 5.4%.
The Bank of England’s target is 2% for CPI, and they are still hopeful that the rate of inflation will drop to below this level in 2012.

The prolonged period of high inflation has made it difficult for savers to keep up with rising prices. At the moment there are no standard savings accounts which allow savers to ensure that savings keep up with inflation according to Moneyfacts.