Taking a turn away from double glazing just for a minute, I want to talk a little bit about the extra bit of good news that came out about the economy today. This time, it was about a further fall in inflation.

The Consumer Price Index rate of inflation fell from 1.9% last month to 1.7% this month. The Retail Prices Index fell 0.1% to 2.7% for February. Most however pay the most attention to the CPI. 1.7% inflation is below the Government target of 2%, which they believe to be a steady and manageable rate of inflation for the UK economy. The problem has been for the past few years is wages have mostly been stagnant, or seen very small growth, way under the rate of inflation. But this pattern now seems to be turning in these past few months, and people are now starting to believe that they are going to see a bit more of their money.

So What Does It Mean For Us?

Lower inflation means lower price increases. One of the reasons for the drops in inflation over recent months has been stabilising and lowering fuel prices, as well as other items such as groceries staying put too. In the long run, the less prices of things go up, the more money we all get to keep out of our wage packets. This for us as an industry is a good thing.

The more money left in the pockets of the general public to spend the better. It allows them to focus their minds on other purchases for the home that they need. And this is a crucial time of year for inflation to be dropping. We are approaching the start of the home improvements season, where people start to out of their houses, into their gardens and start to look at what needs improving on the external of their property. Any positive news about inflation and the wider economy will only serve to boost the homeowners spending confidence, something we can all be thankful for.

Wary Of Further Falls

Whilst falling inflation and more disposable income is generally a good thing for our industry and the wider economy, we should remember that inflation is required to a degree to keep the economy stable. If inflation were to ever fall below 0% (we’re a bit away from that but it remains a distant possibility) we would have deflation, which would mean the price of goods would actually fall. This would add a serious financial burden to many businesses as the value of their products falls.

To combat the threat of this, the Bank of England should be looking at raising interest rates. Although they have already advised that interest rate rises are a way off yet, small increases from the base rate of 0.5% might help keep the inflation rate at that steady 2% target. The plus sides to that is that savers would start seeing a bit more interest from their savings. Rates have been paltry for the last 5 years, it might be nice to earn a few extra quid per month.

Overall though, inflation falling remains a good thing for our industry. Our own raw materials should be under less strain, which should in the future limit the amount of future price increases. But also, consumer confidence continues to be boosted each and every time the media puts out a bit of positive news