CPI falls to 2.5% in March
Housing, recreational activities, transport, food and clothes continue to inflate the cost of living
Savers still going backwards
Kevin Doran, chief investment officer at AJ Bell, comments
“The year-long pay squeeze may have ended with wages finally back on par with inflation in February but the fact is, any cash they hold in savings accounts continues to go backwards in real terms. Inflation of 2.5% still comfortably outstrips the returns available from most cash accounts and so anyone with large amounts of cash savings really needs to think about other forms of investments if they want to preserve the spending power of their money.
“The Bank of England will be pleased to see inflation falling back towards its 2% target but with economic data looking generally solid, the Monetary Policy Committee is still going to be thinking very hard about raising interest rates when it next meets in May. However, even this won’t offer much succour to savers as any rises are likely to be modest and certainly nowhere near enough to cancel out inflation.”