LONDON: British consumer price inflation fell last month to its lowest level since records began in 1989, and it looks set to fall further still, easing a squeeze on consumers just as national elections approach.
Official figures on Tuesday showed the annual rate of consumer price inflation fell to 0.3 percent in January, as expected in a Reuters poll, from 0.5 percent in December.
The tumble largely reflected a slide in global oil prices, which last month fell to their lowest level in almost six years at below $45 a barrel, as well as lower food prices.
Coming less than three months before a parliamentary election, Prime Minister David Cameron will welcome the figures as good news for households, boosting their spending power after years of weak wage growth.
The Official for National Statistics estimated January’s CPI figure was the lowest since 1960, using models which go back before the introduction of the index.
The plunge in inflation could also delay a first interest rate rise by the Bank of England since the financial crisis, if price falls spread beyond food and energy.
The fall of inflation would have been sharper but for a softer slowdown in the fall in clothing prices in monthly terms, which the ONS attributed to a greater number of discounts in December than the previous year.
