Inflation retreats

Inflation dipped to 1.1% in May reflecting lower seasonal food and petrol prices in that month compared with May 2001, according to National Statistics.

The underlying rate of inflation - which excludes mortgage repayments - fell to 1.8% in May from 2.3% in April. The decline, the steepest month-on-month fall since 1993, makes an early increase in interest rates less likely.