Inflation fell further than predicted in September, dropping from a six-month high of 2.70% in August.
Experts were predicting the Consumer Prices Index (CPI) rate to fall slightly to 2.60% in September, from 2.70% in August – but downward contributions from food and non-alcoholic drink prices, amongst other factors, led to a lower CPI rate of 2.40%.
According to the Office for National Statistics (ONS), the largest downward contribution to the CPI rate was in the food and non-alcoholic beverages category, with lower meat and chocolate prices (not together I hope!) of particular note.
Other downward contributions came from passenger air and sea fares, recreation and culture (particularly computer games), and women’s clothing.
On the flipside, increases to electricity and gas prices are the largest upward contribution to the overall inflation figure, which is not great news with the cold winter nights fast approaching.
So, good news for foodies and chocoholics, as well as gamers and those planning an overseas cruise – not such good news for our utility bills though!
Of course, inflation can be a very personal thing – what you might spend your money on could be completely different to the next person. Not to be flippant, but you may be a vegetarian or prefer to steer clear of confectionery, for example.
Your personal inflation rate is probably very different to the CPI measure and it should only be viewed as a general indication of the prices of good and services – only you really know how much your costs are rising by.
But these figures can be a good overall indicator of how things are going in the wider economy, with some commentators already stating that this reduces pressure on the Bank of England to increase the base rate in the near future.
For savers, the good news is that there are more accounts to choose from that match or beat the CPI rate, compared to last month - as you can see from the table below. However, you will need to tie your cash up for at least three years to ensure that your money is not losing value in real terms.
Take a look at our fixed rate bond and Sharia account best buy tables for more on these accounts.
In addition, there are a handful of interest-paying current accounts and children’s savings accounts that could be used to counteract the effects of inflation - albeit usually for smaller amounts and/or with fewer savers able to access those accounts.
Ultimately, the rate of inflation often varies from month to month and trying to keep pace with it can be problematic at best.
However, we can all at least mitigate the effects of inflation on our cash savings by choosing the accounts with the best possible interest rates that suit our own specific circumstances.
Take a look at our independent best buy tables or call us on 0800 011 9705 for help finding the most suitable accounts for you.
So, whether you are a vegetarian or a chocoholic, better returns are likely to be available for your savings.
You might also like...
@savingschampion
Find us on Facebook