UK inflation falls to two-year low in January

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UK inflation fell to 1.8% in January, the lowest in two years, the Office for National Statistics said.

This is down from 2.1% the previous month.

A fall in electricity, gas and other fuels drove the decline, the ONS said.

Head of Inflation Mike Hardie said: “The fall in inflation is due mainly to cheaper gas, electricity and petrol, partly offset by rising ferry ticket prices and air fares falling more slowly than this time last year”.

It means that rises in pay are now now outpacing inflation.

The rate of inflation is now below the Bank of England’s 2% target and has fallen from the five-year peak of 3.1% in November 2017 in the wake of the Brexit referendum vote.

Energy prices fell because of Ofgem’s energy price cap which came into effect from 1 January 2019, the ONS said.

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