Inflation falls once more

Cuts in mortgage interest rates and falling petrol prices slashed December’s inflation rate as measured by the RPI Retail Prices Index. It dropped to 0.9% from November’s 3% rate. The 70% fall was the largest for almost 50 years.

Under the Consumer Prices Index (CPI), which excludes housing costs and is the government’s preferred measure, it was down to 3.1% from 4.1%, helped by the 2.5% cut in VAT.