The speed of inflation has fallen to its lowest degree since March final 12 months – boosting client spending energy for struggling retailers within the run-up to Christmas.
The Workplace for Nationwide Statistics (ONS) reported CPI inflation falling from 2.four% in October to 2.three% final month – pushed by the most important month-on-month fall in petrol costs for greater than three years as oil prices tumbled.
Retailers will hope slower tempo of value rises – coupled with figures final week exhibiting a surge in wage development to ranges not seen for nearly a decade – will assist shoppers really feel extra assured about spending within the run-up to Christmas amid warnings about dire buying and selling within the run-up to Brexit.
The ONS figures, nonetheless, confirmed little proof outlets had begun discounting in November as proof grows of a markdown frenzy to drive gross sales in newer weeks.
One research this week pointed to “document ranges” of discounting on the finish of a dire 12 months for the sector which noticed woeful client confidence mix with larger prices to see Toys R Us, Maplin and Home of Fraser collapse.
The retail tycoon who purchased the division retailer chain out of administration, Sports activities Direct boss Mike Ashley, has described “the worst November in residing reminiscence” for top road retailers.
A revenue warning from ASOS this week confirmed robust on-line performers have been additionally on the mercy of the spending slowdown that has contributed to the necessity for a string of different main chains to hunt rescue offers and shut shops.
The ONS stated rises in tobacco costs – reflecting Funds responsibility will increase – have been the primary upward strain on inflation final month – with prepare and ferry fares additionally contributing.
Supporting the draw back was the autumn hunch in oil costs – pushed by renewed fears of a glut in world provides.
A barrel of Brent crude is at present buying and selling at its lowest degree for over a 12 months – at $56 – suggesting it should preserve its place as a important driver of easing inflation this month.
The ONS additionally famous roles from falling costs for media-playing tools equivalent to televisions and theatre tickets.
Mike Jakeman, senior PwC economist, famous: “Setting the apart the consequences of unstable elements equivalent to gasoline, it’s clear that inflation is on a downward development.
“Each headline and core inflation measures have steadily slowed throughout 2018, because the impact of a weaker pound has diminished and financial development has remained tepid.
“Inflation returning in the direction of the Financial institution of England’s 2% goal is nice information for staff, who’re receiving the twin advantage of accelerating wages and slowing inflation, pushing up their earnings development in actual phrases.”