Friday, 18 April 2014

UK Interest Rates Fall in March

The UK economic recovery seems to be gaining momentum at the moment, as this month that rate of UK inflation fell. What does this mean for those of you are there who are thinking of putting your business up for sale right now?

Inflation is the rate that consumer prices for goods and services goes up against real wage rises. If there’s a rise in inflation, it means that customers have less purchasing power. A fall, therefore is advantageous to the business community, as it means that customers have more purchasing power to the pound, stimulating spending.

The Rate of Inflation
So what does this latest fall in the rate of inflation mean and what are the specifics? According to the Office of National Statistics (ONS), UK inflation, as measured on the Consumer Price Index, slipped from 1.7% in February to 1.6% in March.

This figure actually further establishes an ongoing statistical trend running through UK inflation right now; it’s fallen for the third month in a row. Furthermore, inflation is sitting well below the Bank of England’s 2% target and it has done so for some time.

This latest Consumer Price Index figure is the lowest recorded since October 2009 and it isn’t the only inflation news coming through right now, as the nation’s other significant measure of inflation, the Retail Price Index, slipped from 2.7% to 2.5%.

Specifically, experts are suggesting that the biggest reason for the fall of inflation across the board came from petrol prices. They actually (and quite unusually for petrol) stayed level between February and March. In contrast they rose 2.2p per litre the month before.

However Petrol Prices weren’t the only reason that inflation fell across the country, clothing prices also contributed and so did food prices. So what does this mean the business sales industry?

What This Means at RTA Business
Because this is the sixth consecutive time inflation rates have fallen rather than risen, the gap spanning average wage growth (they rose by 1.4% in three months to January) and price rises for consumer goods continues to shrink, it means that consumer purchasing power has strengthened.

That’s really good news if you’re looking to sell your business right now. This is because if consumers are spending more, there’s more money to go around. It means not only that you are earning more, which makes your business look more attractive to a potential buyer, but that this buyer is more likely going to want to expand their business by buying yours. RTA Business knows now is a good time to sell.


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