On 19th 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, i.e. 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.

Hazel Wright
Partner, Hunters
020 7412 0050