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Inflation sees shock fall to 2.4%

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  • 17/07/2012
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Inflation sees shock fall to 2.4%
UK inflation has dropped to its lowest level since November 2009 after a shock fall to 2.4%.

Consumer Prices Index inflation fell 0.4% between May and June, official statistics showed today, well below analysts’ expectations. They had expected CPI to remain unchanged at 2.8%.

Inflation figures have largely been below consensus forecasts this year, a reversal of the pattern seen in 2011.

Having been as high as 5.2% last September, CPI inflation came in at 2.8% last month, the lowest level since November 2009’s 1.9% figure.

Capital Economics now expects UK CPI inflation to stand at around 1% by December 2012, as energy price increases fall out of the index and core inflation drops sharply.

Meanwhile Retail Prices Index (RPI) inflation fell to 2.8%, down from 3.1% in May. The largest downward pressures came from motor fuels, food, clothing & footwear.

The forecaster has suggested that drop could continue into 2013, predicting inflation may fall as low as 0.5%.

 

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