Inflation falls from 3.5% to 3.0% - Money - News - Moneyfacts

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Inflation falls from 3.5% to 3.0%

Inflation falls from 3.5% to 3.0%

Category: Money

Updated: 22/05/2012
First Published: 22/05/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Inflation figures released today show the Consumer Prices Index (CPI) fell during April, from 3.5% to 3.00%.

It is the lowest level the CPI inflation has fallen to since February 2010.

To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 3.75% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 4.99%.

Today there is a choice of 159 standard savings accounts that taxpayers can choose from to negate the impact of tax and inflation.

However, this is well up on the 50 accounts that were available to savers looking to beat the effects of inflation last month.

The impact of inflation on savings means that £10,000 invested five years ago, allowing for average interest and tax at 20%, would have the spending power of just £9,208 today.

"CPI may have fallen today but it hasn't stopped the misery affecting the thousands of people with a standard variable rate mortgage who have seen the monthly cost of their mortgage rise even though Bank of England base rate remains the same," said Sylvia Waycot, spokesperson for Moneyfacts.co.uk.

"And it has done nothing to ease the plight of savers who continue to struggle to find a home for their money that is going to do it justice rather than just keep it safe.

"Today's news means that there are 159 standard savings accounts that negate the effects of inflation.

"The silver lining is that last month there was a choice of only 50 accounts."

Despite today's fall, the rate of inflation remains above the Government's long-term target of 2%, and it was recently warned by the Bank of England that it will take longer than expected to fall to such a level.

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