UK inflation falls to 3.6 percent
The UK consumer prices index has fallen to 3.6% in January, according to the Office for National Statistics.
The consumer prices index is down 0.6% from 4.2% in December. The retail prices index fell to 3.9%, from 4.8% in December.
The ONS has cited the rise in VAT from 17.5% to 20% in January 2011 as a significant contributor to the fall in both CPI and RPI between December 2011 and January 2012. The increase led to an increase in prices between December 2010 and January 2011. The ONS says there were no such pressures on prices between December 2011 and January 2012.
The ONS says the largest downward pressures on CPI came from fuels & lubricants, products bought in restaurants and cafes, tobacco, vehicle maintainance & repair, the purchasing of new vehicles and alcohol consumption. Annual inflation has now fallen by 1.2% in the past two months.
The largest downward pressures to RPI came from motoring expenditure, alcoholic drinks, food and tobacco. At 3.9%, RPI now stands at its lowest level since February 2010, when it stood at 3.7%.
The Bank of England’s target rate for CPI is 2%. In December 2011, Bank of England executive director and chief economist Spencer Dale said inflation would fall to around 3% as early as March 2012.
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