Inflation falls to lowest level in nearly two years

The UK inflation rate fell to 2.1% in December, from 2.3% the previous month, according to the Office for National Statistics (ONS).

The Consumer Prices Index (CPI) figure was the lowest in nearly two years, pushed down by petrol price falls.

The inflation reading was in line with analysts’ expectations.

The figure is close to the Bank of England’s target of 2% and may mean the Bank is less likely now to consider any rate rises in the near future.

Inflation is being outstripped by average UK pay growth, with the most recent available figures showing that wages excluding bonuses were up by 3.3% for the three months to October 2018.

The head of inflation at the ONS, Mike Hardie, said: “Inflation eased mainly due to a big fall in petrol, with oil prices tumbling in recent months.

“Air fares also helped push down the rate, with seasonal prices rising less than they did last year. These were partially offset by small rises in hotel prices and mobile phone charges.

“House price growth was little changed in the year to November, with buoyant growth across much of the UK held back by London and the South East.”