Inflation has fallen flat again, dropping to 0% after a slight rise the previous month.
The Consumer Prices Index was unchanged in the year to June 2015, the Office for National Statistics has reported this morning.

It has come down from 0.1% in the year to May 2015 when the period of deflation experienced in the UK came to a halt. Before that, there had been a 0.1% fall in the year to April 2015.

Falls in clothing and food prices were the main contributors to this month’s change in the rate along with smaller rises in air fares than a year ago.

CPIH (not a National Statistic) grew by 0.3% in the year to June 2015, down from 0.4% in May 2015.

IFP board member Chris Williams, chief executive of Wealth Horizon, said: “Despite the billions of pounds of stimulus that has been pumped into the UK economy, inflation continues to stagnate. The fallout from the supermarket price war continues to weigh heavy, with falling food and clothing prices dragging down the overall figure.

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“However, we expect much of this could be short-term. The sharp fall in the oil price last year will soon come out of the equation and, while we do not expect inflation to rocket, we do expect a steady move back towards its official target of 2% as the year progresses.”

Rain Newton-Smith, CBI director of economics, said: “Price inflation remains elusive. While this is likely to persist in the coming quarter, inflation should rise relatively swiftly from the end of 2015, as the effect of past falls in oil prices fades.

“Inflation of below 1% over the rest of this year should give the MPC enough breathing space to leave interest rates unchanged at least until early 2016.”

According to Moneyfacts, today, all 888 savings accounts on the market beat inflation.

It calculated the effect of inflation on savings meant that £10,000 invested five years ago, allowing for average interest and tax at 20%, would have the spending power of £8,706 today – a fall of 12.94%.

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “Despite savers still feeling the pinch, the market is slowly starting to see the green shoots of recovery, and the current low level of inflation means that savers now have more choice than ever.

“Today, savers have the choice of 696 products that beat inflation, but a year ago there were only 72 products to choose from. Savers on the hunt for decent returns two years ago were even worse off, as absolutely no savings accounts offered a reprieve from high inflation.

“However, now that there are more challenger banks competing to be market-leaders in savings, rates on accounts are showing signs of life. Two years ago the best fixed rate bond paid just 2.90% for those willing to fix for five years. Today, the top paying five-year fixed deal pays 3.53% - a massive 0.63% more.

“Savers need to refocus their attention on these new banks as traditional providers still don’t want or need investors’ funds. A staggering 139 savings accounts on the market pay 0.5% or less, but why opt for this when there are so many more lucrative deals on offer? Savers need to shop around to chase down decent accounts and act fast when they find them.”