The last month has brought more good news on inflation. CPI inflation eased from 1.9% to 1.7% in February, the lowest rate since October 2009. Meanwhile, past falls in commodity and import prices suggest that inflation will continue to descend over the coming months. Recent price pledges by supermarkets and energy suppliers have also increased the chances that both food and energy inflation ease all the way to zero later this year. We therefore continue to think that CPI inflation could fall as low as 1% by the end of the year. This should enable real earnings to finally recover and hence provide more solid foundations for further growth in consumer spending this year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services