CPI inflation rate falls to 12-year low of 1.0%
- Credit: PA
Inflation fell sharply to a 12-year low of 1% in November as lower food and petrol prices kept a lid on the cost of living.
The Consumer Price Index (CPI) measure of inflation dropped more steeply than expected from 1.3% in October, the Office for National Statistics (ONS) said.
It means Bank of England governor Mark Carney only just avoids having to write to Chancellor George Osborne to explain why inflation is more than 1% off its 2% target.
But the continuing slide in oil prices is expected to feed through to a further drop in CPI, and Mr Carney has already acknowledged that he is likely to have to write to Mr Osborne in the coming months.
CPI has not been as low since September 2002 and was last lower in June 2002. It has now been at or below the 2% target for 12 months in a row.
November’s figures showed food and non-alcoholic beverages fell by 1.7% on last year, the steepest drop since June 2002.
Prices in this sector have been falling year on year for five months in a row, the longest such stretch since 2000, amid fierce competition between the UK’s major supermarkets, Tesco, Asda, Saiinsbury’s and Morrisons, which are coming under pressure from discounters Aldi and Lidl.
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Motor fuel fell 5.9% as average petrol prices dropped by 3p per litre over the month and diesel fell 2.9p, both steeper falls than the same month last year. It comes as oil prices have sunk to a five-year low.