Inflation drops to 3.1%

Official data reveals that UK inflation fell sharply in December, down to 3.1%, as retailers slashed...

Official data reveals that UK inflation fell sharply in December, down to 3.1%, as retailers slashed prices in a desperate bid to encourage Christmas shoppers. The Consumer Prices Index (CPI), the Government's preferred measure of inflation, dropped from 4.1% in November to 3.1% in December. This means it is still above the 2% target set by the Treasury. A 2.5% cut in VAT, coupled with early Christmas sales and continued falls in petrol prices, are responsible for the rapid fall in inflation, according to the Office for National Statistics. It adds that the broader Retail Prices Index...