Finally! Boost for families as inflation drops

inflation falling

inflation fallingFamilies have been waiting a long time for some positive economic news, but now some has finally arrived - and it appears to have been worth the wait.

That's because the latest figures from the Office for National Statistics show that inflation fell markedly last month, dropping from 4.8% in November to just 4.2%.

This development should provide a financial boost for cash-strapped parents, whose household budgets have been hit by rising living costs and low wage rises in recent months.

The fall in the consumer prices index rate of inflation came about as a result of pre-Christmas discounting on the UK high street, as the cost of clothing and footwear went down by 2.8% in December.

Other areas where prices fell last month included fuel and alcoholic drinks.

However, there was slightly less positive news on the food front, as supermarket price wars failed to prevent food inflation from increasing by 1.4%.

Looking ahead, Chris Williamson, chief economist at financial information services company Markit, said: "Further falls are likely in coming months, reducing the squeeze on incomes seen last year and therefore providing a much needed boost to economic growth in 2012."

Concerned about the impact of inflation on your savings? Find out how to protect your nest egg by checking out this guide.