UK Inflation at Lowest Rate for More Than Four Years

The UK’s inflation rate, as measured by the consumer prices index, fell to 1.9% in January, for the first time in more than four years and the fall is likely to underline the Bank of England’s message that there is no rush to raise interest rates.

Inflation as measured by the Retail Prices Index rose to 2.8% from 2.7% in December, the Office for National Statistics (ONS) said.

The lower inflation was in large part due to a fall in the cost of recreational and cultural activities, including falling DVD prices and lower entrance fees to attractions.  Discounts on furniture and household goods, and also lower alcohol and tobacco prices, also had an impact, the ONS said.

The Prime Minister tweeted that the figures support the Government’s economic strategy.  Mr Cameron said, “Today’s fall in inflation is more evidence our long term economic plan is working.  We want to ensure a secure future for hard-working people.”

Bank of England Governor Mark Carney indicated earlier this month that interest rates would not rise for some time and according to the British Chambers of Commerce (BCC), the fall in inflation is likely to help bolster this message.