Inflation likely to fall, expert predicts

Inflation is likely to fall in the long term rather than rise as some commentators are expecting, one economist has predicted.

Commenting after figures from the Office for National Statistics revealed the consumer prices index was down by 0.5 percentage points to three per cent in February, editor of Investment and Business News Michael Baxter said the results were ’slightly better’ than he had expected.

He added he refuses to follow the view that quantitative easing is ’stoking up inflation for the future’, remarking he does not expect the government’s asset purchasing programme to result in a ’significant’ rise.

Mr Baxter explained the ’very modest’ annual rate of wage increases is one indication that inflation will not ’take off’ over the coming months, while there are also good reasons to think the price of oil will dip later in 2010, something that would also have ’a downward affect’ on inflation.ADNFCR-2318-ID-19688966-ADNFCR