The financial feel good factor from an improving British economy is spreading to the high street and housing as more positive financial indicators were revealed by the government.
Inflation fell to a four-year low of 1.7% in February, according to The Office for National Statistics (ONS).
The cost of living measured by the Consumer Prices Index (CPI), fell from 1.9% in January, and is running below the Bank of England’s target of 2% for the second month running.
The ONS said the decrease was mainly due to a fall in the price of petrol. Prices dropped an average 0.8p between January and February, compared with a 4p increase in 2013.
Retail Prices Index (RPI) inflation fell to 2.7%, down from 2.8% in January.
House prices up
Meanwhile, a separate report from the ONS showed UK house prices were up by 6.8% in January 2014 compared with 12 months earlier, and increased from 5.5% in December 2013.
London again saw the largest jump in prices.
Annual house price increases in England were boosted by rising home values in the capital, which were up 13.2%, the South East (up 7.1%) and the West Midlands (up 5.3%).
Excluding London and the South East, house prices increased by 3.8% in the year to January 2014.
First-time buyers were paying 7.6% higher on average in January 2014 than a year earlier. For owners moving house, prices increased by 6.5% for the same period.
In the high street, shop tills were ringing up better sales, even though buying has slowed in March, according to the Confederation of British Industry’s Distributive Trades Survey.
Retail sales up
The monthly look at 106 retailers showed sales increased year-on-year for the fourth month running, but growth was weaker than expected.
“Sales are expected to bounce back in the year to April and if this happens, the growth rate will fall into line with February, which was the strongest since the start of the financial crisis in 2007-08,” said a spokesman.
“Supermarket sales improved, but at the slowest rate in four months and, along with falling sales in department stores contributed to overall slower annual growth in March.”
Online sales volumes continued to increase in the year to March.
Barry Williams, Asda Chief Merchandising Officer for Food, who chairs the CBI Distributive Trades Survey Panel, said:
“It’s good to see positive growth on the high street, with sales up on a year ago for the fourth month in a row. The pace of growth has slowed, mainly due to Mother’s Day and Easter falling late this year.”
