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UK sees inflation rate drop below 4%
Source: Agencies |
February 15, 2012, Wednesday
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Print Edition
Print Edition
BRITAIN'S inflation rate fell to 3.6 percent in the year to January from 4.2 percent the previous month, official figures showed yesterday, to the likely relief of cash-strapped households which have seen muted pay increases more than eaten up by rising prices.
The figure published by the Office for National Statistics was in line with expectations and put inflation below 4 percent for the first time since December 2010. The fall came as last year's sales tax increase fell out of the annual comparison. Lower fuel prices also contributed to the decline.
The UK consumer price inflation rate peaked at 5.2 percent in September.
Though inflation has been running above the Bank of England's 2 percent target since December 2009, rate-setters have kept borrowing costs at record low levels and recently approved another monetary stimulus in response to falling output - the UK economy shrank 0.2 percent in the last three months of 2011.
The BOE has held its policy line despite high inflation, arguing price pressures would reduce this year. Markets will be keen to see if today's quarterly economic projections from the bank show prices falling below target later this year.
The figure published by the Office for National Statistics was in line with expectations and put inflation below 4 percent for the first time since December 2010. The fall came as last year's sales tax increase fell out of the annual comparison. Lower fuel prices also contributed to the decline.
The UK consumer price inflation rate peaked at 5.2 percent in September.
Though inflation has been running above the Bank of England's 2 percent target since December 2009, rate-setters have kept borrowing costs at record low levels and recently approved another monetary stimulus in response to falling output - the UK economy shrank 0.2 percent in the last three months of 2011.
The BOE has held its policy line despite high inflation, arguing price pressures would reduce this year. Markets will be keen to see if today's quarterly economic projections from the bank show prices falling below target later this year.
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