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Wednesday 23 July 2014

UK inflation falls below Bank of England's target at 1.9pc

Published 18/02/2014|12:40

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Inflation as measured by the Consumer Prices Index (CPI) dropped to 1.9pc in January from 2pc in December, the UK's Office for National Statistics said.

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The biggest factor in driving down inflation was a fall in recreation and culture prices, household goods, alcoholic beverages and tobacco.

Prime Minister David Cameron said in a message on Twitter: "Today's fall in inflation is more evidence our long-term economic plan is working. We want to ensure a secure future for hard-working people."

The fall in inflation is likely to bolster the Bank's pledge to keep interest rates on hold at a record low of 0.5pc and give governor Mark Carney breathing space before the first hike takes place.

Last week the Bank upgraded its growth forecast for the UK economy to 3.4pc from 2.8pc and hinted interest rates are unlikely to rise until 2015.

Inflation as measured by the Retail Price Index (RPI) , which includes housing costs, rose to 2.8pc from 2.7pc in December

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