Inflation falls but has it for you

Inflation in April was 2.8%, down from 3.1 per cent in March, according to the Office for National Statistics.

The chancellor of the Exchequer Gordon Brown said “I believe we are right to maintain our view that directly targeting inflation is the way forward,'' the chancellor told business leaders in London late yesterday. He said inflation is ``this month coming down”

However further pressure came yesterday with data from the service sector showing growth at its fastest rate for more than a decade and mortgage lending also increased with mortgage approvals up to their strongest levels since December 2003.

One of the main contributing factors in the rate drop was the reduction in gas and electricity prices, with this accounting for two thirds of the dip in annual inflation between March and April. But to the average person in the street it does not feel like inflation is coming down.

Karren Dunnell a National statistician said” national inflation figures are based on average spending patterns, but every household is different and the way inflation affects them depends on how they spend their money”

The Office for National statistics is launching a personal inflation calculator, which it is hope will give people a better understanding of inflation and counter the increasing scepticism about government statistics.

If you would like to view more information on the personal inflation calculator or try it online click here