Inflation starts to move in the right direction as food prices fall

The latest inflation figures are out this morning and as most pundits predicted,there has been a slight fall.

Inflation for October stood at 5 percent lending support to Bank of England predictions that it has probably peaked and will fall sharply next year.

The fall of 0.2 per cent was driven by lower food, air transport and petrol inflation.

Food prices fell 0.9 percent,their sharpest drop for the month of October since 1996.

Upward pressures on inflation came from utility prices, which rose at their fastest annual rate since February 2009. Clothing prices also rose.

Responding to the figures,Owen Smith MP, Labour's Shadow Treasury Minister, said

"Families and pensioners are really feeling the squeeze because the VAT rise and the Government’s failure to act on soaring energy prices are pushing up inflation. With Britain now having the highest inflation of any EU country except Estonia, it’s time out of touch Ministers started taking some responsibility and took action now.

Graeme Leach, Chief Economist at the Institute of Directors said:

"Hopefully inflation has now peaked and it's downhill from here on. There are no guarantees in this business, but a combination of the deteriorating economy and fading energy and VAT effects, suggests high street inflation is now on a downward path.