Householders are unlikely to have much extra cash to spend in the coming months despite the fall in the annual inflation rate, according to a Northern Ireland economist.
Northern Bank's chief economist Angela McGowan was speaking following news the Consumer Price Index (CPI) fell to 2.5% in August from 2.6% in July. The rate of inflation hit a 31-month low in June after declining from a peak of 5.2% last September, but unexpectedly rose to 2.6% in July.
Ms McGowan said the latest slowdown in price rises won't be much help.
"Although it is good to see inflation coming down, the pressure on households is by no means off," she said. "With annual wage growth in the UK sitting at only 1.5 per cent and prices (on average) rising by 2.5 per cent, it is not hard to see why many households are still reluctant shoppers."
And although the rise in the price of some goods and services has eased, the price of some key monthly costs has risen.
"Local motorists are only too aware that transport costs are still rising - with fuels such as petrol rising by 7.1 per cent over the year," said Ms McGowan.