Petrol StationInflation fell slightly in December, easing the financial pressure on households as fuel, clothes and alcoholic drinks rose in price less quickly.

Consumer Prices Index (CPI) inflation in the UK was 4.2% in December, It was 4.8% in November, according to ONS. Retail Prices Index inflation including mortgage interest payments has fallen to 4.8% from 5.2%. This is along the Bank of England predictions that inflation will be 2% by late 2012.

Consumer price inflation could fall sharply further in January becuase of the sales and price cuts and could be close to 3.5pc as last year's VAT hike from 17.5pc to 20pc drops out," . In addition, favourable base effects should bring inflation down as oil and commodity prices rose sharply in late 2010 and early 2011."

It is thought that the Bank of England expects to conclude its latest £75bn in asset purchases - known as quantitative easing by early next month. And  inflation still looks set to fall below its target further ahead and today's figures support our view that we will see more QE from the Bank of England next month in an attempt to prevent this," said Vicky Redwood, chief UK economist at Capital Economics.

Actions: E-mail | Permalink |

Post Rating