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UK inflation rate falls to record low of 0.3% in January | |
(35 minutes later) | |
The rate of UK Consumer Prices Index inflation fell to 0.3% in January, its lowest level since CPI records began. | The rate of UK Consumer Prices Index inflation fell to 0.3% in January, its lowest level since CPI records began. |
Inflation as measured by the Consumer Prices Index fell from 0.5% in December, helped by cheaper motor fuel. | Inflation as measured by the Consumer Prices Index fell from 0.5% in December, helped by cheaper motor fuel. |
The Bank of England has said inflation may temporarily turn negative in the spring. | The Bank of England has said inflation may temporarily turn negative in the spring. |
A supermarket price war has also contributed to the fall in the inflation rate. | A supermarket price war has also contributed to the fall in the inflation rate. |
It is the lowest rate of CPI inflation since estimates of the measure began in 1988. | |
Oil falls | |
Inflation as measured by the Retail Prices Index fell to 1.1% from 1.6% the previous month, the Office for National Statistics said. | |
"Falling prices for motor fuels and food were the main contributors to the slowdown in the rate of inflation," it added. | |
ONS statistician Phil Gooding said average petrol prices had fallen on the month, as had prices for foodstuffs such as milk, fruit, and games, toys and hobbies. | |
He added that a slowdown in the rate of price inflation for alcohol and some recreational goods and services had also contributed to the overall slowdown. | |
The ONS said that while the cost of food and fuel is lower than a year ago, prices for other items, such as clothing and furniture, are rising. | The ONS said that while the cost of food and fuel is lower than a year ago, prices for other items, such as clothing and furniture, are rising. |
'Purchasing power' | |
A lower inflation rate was "excellent news for the consumer's purchasing power", said Howard Archer, chief UK and European economist for IHS Global Insight. | |
"With inflation likely to fall further and earnings growth now finally trending upwards, consumers should see appreciable improvement in their purchasing power as 2015 progresses," he said. | "With inflation likely to fall further and earnings growth now finally trending upwards, consumers should see appreciable improvement in their purchasing power as 2015 progresses," he said. |
However, he noted that core inflation, which strips out food, energy, alcohol and tobacco prices, rose to 1.4% in January from 1.3% the month before. | |
"The rise in core inflation highlights the fact that the UK is far from suffering generalised deflation," he said. | "The rise in core inflation highlights the fact that the UK is far from suffering generalised deflation," he said. |