Inflation rates are at an all time low due to decreasing petrol prices and food price wars by the three major supermarkets in the UK. The Chancellor, George Osborne stated it was good news for the economy via a tweet 'Inflation is 0.5% - lowest level in modern times. Welcome news with family budgets going further & economic recovery starting to be widely felt.'
One would expect with the falling prices of food and fuel that we would be feeling as though we have more spending power, but is this really the case for most households? In most cases wages have not been increasing at the same rate as expenditure since the start of the banking crash in 2008. Other major household expenses such as rent have continued to go up, as well as historical energy prices. In most cases falling energy costs have not been fully passed onto consumers.
Shabana Mahmood, Labour's Shadow minister stated that pressure on low wages meant that the standard of living meant that people are still £1,600 a year worse off.
Taking into consideration all of these facts major economists are not forecasting a rate in bank interest rates any time soon, despite the continued increase in house prices, which are not predicted to stop at any time in the near future. Sending out concerns about a possible house price bubble.
The ONS, (Office of National Statistics) stated that property prices rose across the whole of the UK by 0.2% between October and November, which means that the average house is now worth £271,000, just below the peak last August when they were at £274,000.
If you would like more information about buying a new home then why not pop into your local branch of Intercounty for a chat and a coffee or give our team a call on 0844 811 1090, available 8.00-21.00 week days.