Inflation Slows As Price of Petrol Falls

By Evening Standard, London

Dec. 13–A sharp fall in petrol prices drove inflation down to a five-month low in November, keeping alive hopes of further interest rate cuts next year.

Inflation on the Consumer Prices Index measure fell from 2.3 percent to 2.1 percent, official data showed today. Although still above the Government’s 2 percent target, it is an encouraging sign inflation has peaked.

Petrol prices, the main factor behind inflation’s recent rise, fell 3.6p per litre on average in November compared with a rise of 1.1p a year ago.

Policymakers will also take comfort from news that inflation on the alternative Retail Price Index measure, on which many wage deals are based, fell to a three-year low of 2.4 percent just before the January pay round.

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