Graduates to benefit from falling rate of inflation

The Governor of the Bank of England, Mervyn King, said that inflation, on the old Retail Price Index measure, will probably fall into negative territory next year for the first time since 1960, as mortgage rates come down.

This is great news for graduates as interest on student loans is based on the RPI measure of inflation. Whether this means loans could actually be reduced by negative inflation remains to be seen, but either way it looks like interest charges will be coming down although any benefit will not be seen until Sept-09, when next years student loan interest rate is set.