. The Consumer Price Index, which tracks the price of a range of goods and services, was up just 0.1% in October, the smallest increase since April. On an annual basis, inflation was 1.4%; the lowest since 2009. The cost of energy, clothing, transportation, and medical care all continued to decline.
The slowdown in prices follows a period of high inflation earlier this year, driven largely by increased demand for goods and services as economies across the world reopened after Covid lockdowns. As businesses reopen and consumer spending returns to pre-pandemic levels, the rate of inflation should stabilise. However, the prospect of business closures and further lockdowns could cause prices to fluctuate.
The Labour Department’s overall index of consumer prices is closely watched as it widely affects many areas of the economy, including investments, wages, and budget decisions. With prices holding steady in October, analysts are expecting an increase in the ease of monetary policy in the coming months to protect the fragile recovery from the effects of the coronavirus. In addition, analysts suggest that further measures may be taken to stimulate the economy, such as additional fiscal spending.