Inflation falls to record low

Posted On: 
17th February 2015

Inflation dropped to 0.3% in January, the lowest rate on record.

The
Office for National Statistics attributed the fall in the Consumer Price Index to lower fuel and food prices. CPI in December was 0.5%.

Danny Alexander: Inflation fall a golden opportunity for the UK

Labour: Low inflation won't solve deep-seated economic problems

David Cameron
welcomed the news, saying it meant "security for hardworking taxpayers and their families". George Osborne told BBC News: "What Britain really needs to see is competence, not chaos."

Danny Alexander, the Lib Dem Chief Secretary to the Treasury, said the figures, coupled with strong employment statistics, showed the UK “has a golden opportunity to secure this recovery for the long term”.

Mark Carney, the Governor of the Bank of England, predicted last week that inflation would fall to below 0% at some point in the spring.

Although deflation is a real concern in the Eurozone, Nick Clegg said British households should not be overly concerned about it.

The Deputy Prime Minister told reporters: "I don’t think people should worry unduly about deflation. I think most people will be delighted that when they fill their car up with a tank of petrol, it is much cheaper to do so now than it was before."

The ONS also published data on housing costs, which showed the average price across the UK rose 9.8% in the year to December. In London, the figure was 13.3%.