Inflation rate falls to 0.5%
Official figures have revealed that the UK inflation rate fell sharply to 0.5% in December, the joint lowest on record. Inflation as measured by the CPI fell from 1% in November to its lowest rate since May 2000, helped by cheaper fuel prices. The ONS added that the drop in inflation was also due to the rises in gas and electricity prices in December 2013 falling out of the equation.
The RPI measure of inflation fell to 1.6% from 2%. Chancellor George Osborne hailed the fall in the inflation rate as good news. He tweeted: “Inflation is 0.5% – lowest level in modern times. Welcome news with family budgets going further & economic recovery starting to be widely felt.” Meanwhile, economists said that a further fall seems likely.