On
19 May 2015, the Office of National Statistics (ONS) announced that the
Consumer Price Index (CPI) turned negative (to -0.1%) for the first time since
1960.
Whilst the
Bank of England and the Chancellor both say this is only temporary, for all
divorce clients who have maintenance which is index linked, it is worth checking
the exact terms of the court order.
Many
solicitors will draft for positive changes only, ie this new development won't
change any existing payments. However, if the drafting provides for 'variation
by the rate of CPI' then the payers will be paying less, and the payees
receiving less. Court orders give a specific month in the year for adjustment,
so this only applies to orders where the variation is fixed to change using
April 2015 figures.
Consumer
prices in the shops may come down, and this is expected to drive economic
growth.
CPI
does not include the cost of housing, which is a major cost in household
budgets.
