Living standards on the rise as low inflation boosts family finances in UK

Living standards are improving as prices rise slower than wages.

The consumer prices index measure of inflation held firm at 1.9 per cent last month, according to the Office for National Statistics (ONS).

With wages rising by 3.5 per cent, millions of workers have more money to spend or save.

On the up: With wages rising by 3.5 per cent and inflation holding firm, millions of workers have more money to spend or save

On the up: With wages rising by 3.5 per cent and inflation holding firm, millions of workers have more money to spend or save

The inflation figures came a day after the ONS reported a record-breaking month for jobs, with the employment rate now at a joint all-time high of 76.1 per cent and unemployment at a 44-year low of 3.9 per cent.

Kevin Brown, of investment firm Scottish Friendly, said: ‘It’s really good to see that, given the uncertainty shrouding Westminster, the economy is holding up well and the prospects look strong. 

‘Wages are rising faster than they have for three years and now we find that inflation is holding steady.’

The figures will be a boon for mortgage borrowers, as inflation remains below the Bank of England’s 2 per cent target, meaning it is unlikely to raise interest rates soon. 

However, lower interest rates are a blow to millions of savers because there will be no improvement in the returns they get on their nest eggs.

High fuel and clothing prices were the key drivers of inflation in March, with petrol up 1.2p per litre from a year earlier at an average of 120.3p, while diesel climbed by 1.4p to 130.7p. But food prices fell.

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The separate retail prices index measure of inflation, used to calculate the increase for many company pensions, rose 2.4 per cent.

 

 



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