Tuesday, January 20, 2009
Inflation down - but not as much as hoped
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

Inflation dropped last month, as expected, but hopes of a fall in consumer price inflation below 3% were not met; instead it fell from 4.1% in November to 3.1% last month. Though petrol prices fell and much of the Vat cut was passed on, food-price inflation remained in double figures.

The most eye-catching number, however, was for retail price inflation, which slumped from 3% to just 0.9% under the impact of lower mortgage rates. Even excluding mortgages rates, the RPIX measure dropped from 3.9% to 2.8%, close to its old 2.5% target. More details here.