CPI falls to new record low
The rate of CPI inflation fell to 0.3% in January, the lowest level since CPI records began and down a further 0.2% from December's record low of 0.5%.
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Falling prices for motor fuels and food were the main contributors to the slowdown in the rate of inflation according to ONS statistics, which stated that smaller price falls than a year ago for clothing partially offset the slowdown.
CPIH grew by 0.4% in the year to January 2015, down from 0.6% in December 2014.
The rate of Retail Prices Index inflation fell to 1.1%, down from 1.6% in December.
Last week, in a letter to the chancellor to explain CPI inflation falling to 0.5% in December, Mark Carney stated that the central bank’s projections show inflation dipping to zero in Q2 and remaining “close to zero” for most of the year.
An accompanying BoE report added that “it is now more likely than not that CPI inflation will dip briefly below zero at some point in the first half of 2015”.
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