The rate of Consumer Prices Index (CPI) inflation in the UK fell to 2.4% in June, down from 2.8% in May according to the Office for National Statistics (ONS). This is the lowest rate since November 2009. This surprised analysts who expected inflation to only marginally fall to around 2.7%
The slowdown in inflation was mostly due to a surprise fall in the cost of clothing, as retailers started their summer sales early, as well as a fall in petrol prices.
Meanwhile the Retail Prices Index (RPI) inflation – which includes mortgage interest payments – fell to 2.8% down from 3.1%.
Obviously for savers a fall in inflation is good news, as it means that their deposits are maintaining their buying power. In fact, with the headline rate of inflation falling to 2.4% it means that more savings accounts and cash ISAs now provide inflation beating returns.
Calculate your personal inflation rate
But remember that the headline rate of inflation is an overall statistical measure. The personal level of inflation each of us experience is dependent on what we spend our money on. So here is a calculator which can help work out your personal inflation rate.