27 May 2009

Inflation Still Falling

It ain't over till....well, we're not sure actually, and outlooks are changing on a daily basis. Today, the USA are increasing confidence (despite rising jobless numbers) on the foreign exchange market by saying they believe their recession will be over by the third quarter. Confident indeed, and the increase in risk appetites on the markets is showing a weakening of some of the 'safer' currencies.

In the UK, deflation still lingers and looms on the horizon. Easy to forget about, this factor could mean some nervous times. The Office for National Statistics showed that both the CPI and the RPI were down in April, meaning annual inflation is also down.

What's to blame for this? Top of the list are lower fuel and food prices. The data released has caused economists to say that deflation is still a higher risk than a "rapid rise in inflation".

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