Surprising drop in inflation

Surprising drop in inflation

Surprising drop in inflation

The Consumer Price Index (CPI) saw a surprising 0.4% fall from 4.4% in February to 4.0% in March. Most of the negative pressure came from food and non-alcoholic drink prices that saw a dramatic fall 1.4% from February to March. Over the same period last year there was a 0.3% rise in food and drink prices, this drop reflects widespread supermarket sales last month.

There were also drops in recreation and culture and air transport saw a lower rise than a year ago. The Bank of England governor, Mervyn King, still believes that inflation will remain above the government target of 2% this year. But he expects we will reach the target in 2012. To do this he hinted at bank rate increases in line with market expectations.

The pressure on the Monetary Policy Committee (MPC), that decide the Bank of England base rate has, for the moment, been released. It is a fine line to tread but contractors looking for a new house will undoubtedly manage their finances carefully. If you are still unsure about your mortgage options as a contractor, Contractor Mortgages Made Easy will make things clearer for you.

Everyone knows that buying a home is seriously difficult, saving the deposit alone can take years without outside help. According to research from Safe Home Income Plans (SHIP) the average first home is seven times more expensive now than in 1983 which could have been when your parents bought their first home.

The director general at SHIP, Andrea Rozario, commented:

"These housing figures really highlight the struggle that young people now face to take those first steps onto the housing ladder."

"House prices have risen far faster than incomes have done since the older generation bought their first homes."

"Furthermore, those who bought homes in 1983 and are now likely to be heading towards retirement will have benefited from the increase in value of their home."

"They could well look to help their children by releasing a lump sum from their property - therefore providing the funds for an first-time buyer deposit, whilst using the leftover amount to supplement a retirement income for themselves."

Contractors saving a deposit for their first contractor mortgage will be well aware of this situation but the historical context is astonishing. Let's hope new legislation like the FTB directive can help.

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