February 17, 2009

Retail Price Index near zero in Britain

Annual retail inflation in Britain fell to its lowest rate in 49 years in January, staying just above zero, the National Statistics Office said.

The Retail Price Index fell to an annual rate of 0.1 percent during the month, down from December's 0.9 percent, The Times of London reported Tuesday.

The retail inflation rate was 0.5 percent in March 1960, The Times said.

Much of the month's price decline came from falling oil prices and mortgage interest rates declining in the wake of the Bank of England reducing lending rates, The Times said.

In a separate measure of inflation, the Consumer Price Index fell by 0.7 percent in January, giving the CPI an annual rate of 3 percent.

The central bank, which has set a target for the CPI at 2 percent, has lowered its lending rate to an historic low of 1 percent. Further rate cuts are expected in the bank's next policy meeting, The Times said.