UK inflation falls to 4.2%

The UK consumer prices index has fallen to 4.2 per cent in December, according to the Office for National Statistics.

The consumer prices index is down 0.6 per cent from 4.8 per cent in November. The retail prices index fell to 4.8 per cent, from 5.2 per cent in November.

The last time there was a larger fall in annual inflation was between November and December 2008. The falls came from downward pressure on petrol, gas and clothing prices. RPI downward pressures came from petrol, oil & other fuels, gas, clothing and footwear.

Both RPI and CPI have fallen markedly since September 2011, when RPI reached a 20-year high of 5.8 per cent, while CPI stood at 5.6 per cent.

The Bank of England’s target rate for CPI is 2 per cent. Last month, Bank of England executive director and chief economist Spencer Dale said inflation would fall to around 3 per cent by March 2012.