LONDON: UK inflation fell to 0.3% in January from 0.5% in December, the slowest pace since equivalent records began for the consumer prices index in 1989.
UK inflation fell to the lowest level on record in January as the sharp drop in global oil prices fed through to petrol pumps and food prices continued to fall amid a supermarket price war.
The Office for National Statistics said the drop in inflation was driven by falling fuel and food prices. The chancellor, George Osborne, welcomed the news as a “milestone for the British economy” that will ease the pressure on household budgets as he sought to rebuff fears that the UK could be headed towards “damaging deflation”.
Economists in the eurozone and the UK have been watching for signs of a deflationary spiral where consumers and businesses put off spending in anticipation of lower prices. They were reassured by the news on Tuesday that core inflation, which excludes the more volatile prices such as food and energy, actually rose in January, edging up to 1.4% from 1.3% in December, partly on the back of smaller clothes discounts compared with a year ago.
