Inflation starts to fall
The publication of price inflation figures for the twelve months to February 2010 show that the Consumer Prices Index (CPI) measure of inflation is starting to fall.
CPI inflation fell to 3% from 3.5% the previous month. The Retail Prices Index (RPI) measure of price inflation, which includes housing costs, remained unchanged at 3.7% in February.
Looking at the individual contributors to CPI inflation, the downward pressures came from a number of areas. Prices in the recreation and culture categories were largely unchanged between January and February, but a 1.1% increase from a year ago fell out of the time period under scrutiny.
The price of non-fiction books also helped drive down price inflation, with the cost of books rising by less than a year ago.
Although the recent inflation spike from the start of the year now appears to be falling, leading fund managers believe that both inflation and deflation are likely to be an issue for investors in the next year.
Fund managers at the recent series of regional road shows hosted by Fidelity FundsNetwork gave their opinions on inflation prospects over the next twelve months. Some expect inflation, particularly in emerging markets, whilst others think that deflation will be a problem.
This lack of consensus goes to highlight how much uncertainty remains about global economic and investment prospects over the short term.