Inflation fell to 0.9% in April, down from 1.5% in March, data from the Office for National Statistics (ONS) has revealed.

The ONS revealed that falling energy and fuel pump prices had resulted in the largest downward contributions to the change in its Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate between March and April.

Rising prices for recreational goods, however, had resulted in a partially offsetting upward contribution to change, with the largest contribution to the rate at 0.31%.

Killik & Co associate investment director, Rachel Winter, commented: “This pandemic and the measures to contain it have caused a shift in consumer needs and attitudes, and these figures show the impact of April’s lockdown, with the closure of the high street in particular causing lower demand and downward pressure on pricing.
 
“As the Government extends the furlough scheme and businesses face the threat of issuing redundancies, individuals are feeling a substantial amount of pressure over job stability and wage growth.

“Although March’s further rate cut was an effort to lower the cost of borrowing, the situation is rapidly changing and we need to keep a close eye on pricing and consumer spending habits.”

Commenting on what the latest inflation figures could mean for UK savers, Hargreaves Lansdown personal finance analyst, Sarah Coles, added: “The vast majority of savings is in easy access accounts, and while the most competitive accounts currently beat inflation, most people don’t have their money in them. Most easy access savings are with the high street giants – which offer as little as 0.1%.

“Moving your emergency cash – equivalent to three to six months’ worth of expenses – to a competitive easy access account is a great start, but if you have additional savings, you should also consider fixing them for the periods that suit you best.

“Savings rates have been dropping, and we haven’t seen the last of the easy access cuts, so they won’t stay above inflation forever.

“Fixing a portion of your savings means you can get a better rate. You also lock it in, which at a time of falling rates, can prove a valuable option. The interest on these accounts has also been gradually cut over the past few months, so if you want to fix, it’s best to do so sooner rather than later.”

Share Story: