Latest CPI figures: Personal finance industry reacts

Latest figures from the Office of National Statistics show there was a slight dip in inflation last month, but the rate remains very close to 40-year high.

 
Inflation, which measures the rate of price rises, fell to 10.5% in the year to December, compared to 10.7% in November; while petrol and energy costs have eased, food prices have continued to increase, the ONS says.

The Bank of England is expected to keep raising interest rates in an attempt to drive down inflation.
 
Here are some initial responses to the news from personal finance and pension experts Andrew Megson, CEO of My Pension Expert and Moshin Rashid, CEO of ZIPZERO.
 
Andrew Megson, CEO of My Pension Expert, said: “Following a very challenging 2022, even a slight easing in the rate of inflation will be welcomed by everyone. However, this is unlikely to be widely celebrated. After all, the cost-of-living crisis has left no room for complacency as households continue to feel the squeeze.
 
“The economy may have managed to outperform initial forecasts of recession, but consumers are still having to adapt to soaring bills. For one, the trend of thousands of people in their 50s and 60s coming out of retirement to bolster their pension savings amid value-eroding inflation is expected to continue; 7% of Britons aged 50 and over “unretired” in 2022, according to My Pension Expert’s latest research, and we could see the same again this year.

“Given that inflation was in double-digits as we entered the year, it will take time for the rate to reverse significantly. In the meantime, it’s crucial that anyone who is worried about the state of their retirement finances to seek help from an independent financial adviser, who will help them make informed decisions and find the right approach for their financial circumstances and needs. Indeed, it is vital for people to understand that they do not need to navigate such a testing economic climate on their own hand – help is available, and people would be wise to seek advice if feeling concerned, overwhelmed or directionless.
 
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Mohsin Rashid, CEO of ZIPZERO said: “While a downward trend in inflation from 10.7% in November to 10.5% in December is certainly welcomed, retailers must remember that the cost-of-living crisis unwaveringly rages on. Inflationary figures remain astronomically high while Britons’ spending power weathers immense financial pressure amid the most challenging economic climate in decades.

“Consumers are having to make tough choices about their expenditure: retailers and brands must do the same. Passing rising costs onto struggling consumers will risk alienating and outpricing target markets. Customer loyalty and, indeed, growth will require a commitment from retailers to support their consumers.

“Yet, effective support requires an understanding of need; there can be no doubt that the race for customer insights is now on. As the sector faces its most desperate moment, those who survive will use insights to inform product development, ensuring that in an economic environment that affords no room for error, meeting consumer needs remains the ultimate priority.”