The measure, known as the Consumer Price Index (CPI), reached a figure of -0.1% in April and based on historical estimates, is the first negative figure that has been recorded in the UK since 1960. It is believed that the biggest contribution to the downturn of inflation came from a fall in travel fares, with costs thought to be 2.8% lower than last year. Food is also 3% cheaper compared to April 2014s figures.
Mark Carney, governor of the Bank of England, discussed his thoughts on whether this statistic represented an ongoing trend in the UK economy. Although he did think that the situation would remain largely similar for the next few months he did think that ‘towards the end [of the year], inflation should start to pick up towards our 2% target.’
In the interview below, Chancellor George Osborne stated that these figures should not be mistaken for ‘damaging deflation.’ Forecasters believe that the negative inflation will not last long and are avoiding describing these figures as a sign of deflation. George Osborne did add that ‘of course, we have to remain vigilant to deflationary risks and our system is well equipped to deal with them, should they arise.’
As a result of these comments, business owners and others are left wondering whether their own companies are equipped to cope with wider economical changes. In light of the figures released it is crucial companies arrange their businesses in a way that will safeguard their operations.
To find out more about safeguarding your business and emergency IT support or if you have any questions please get in touch with us.
360ict provides managed IT services and support for SMEs in central London and the south-east, including London Victoria, Euston, Croydon and Bromley. For more advice on gaining competitive advantage as a mid-sized company, give us a call on 0208 663 4000 or head to our website.