12/10/2010

UK Inflation Remains At Current Rate

According to the Office for National Statistics (ONS), UK Consumer Prices Index (CPI) inflation remained unchanged at 3.1% in September.

Including a higher proportion of housing costs, the Retail Prices Index (RPI), fell back slightly to 4.6%.

As it sets the rate at which benefits change in April, September's figure is of key importance to many claimants.

Most benefits are linked to the CPI and will rise by 3.1%, however pensions will increase by the higher 4.6% RPI.

The Retail Prices Index is also important for wage negotiations and factors the cost of housing.

Inflation for welfare payments was in the Budget from RPI, which is generally higher than CPI and should therefore save money for the government.

The higher RPI benchmark for pensions will not apply until next April.

Although the UK Consumer Prices Index figure remains above the 2% target, the Bank of England expects interest rates to remain at record low levels.

(BMcN/KMcA)


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