Inflation has fallen further, new figures from the Office for National Statistics (ONS) have shown.
The ONS revealed that consumer prices index inflation dropped to 3.1 per cent in December, which was down from 4.1 per cent in November.
This one per cent fall was attributed mainly to the cut in value added tax that was unveiled by the government, which could have helped consumers with their debt management.
In addition, retail prices index inflation fell from three per cent to 0.9 per cent, which was the fastest monthly decline recorded since 1980.
This was mainly due to discounts on mortgage interest payments following the Bank of England’s base rate cuts, as most lenders passed on the 1.5 per cent base reduction in November, the ONS noted.
On January 8th, the Bank’s monetary policy committee voted to lower the base rate to 1.5 per cent, stating that inflation was expected to fall further.
By Jamie Price