UK inflation falls to 3.6%

CPI inflation dropped from 4.2% to 3.6% In January, according to the Office for National Statistics, as 2011's VAT rise comes out of the year-on-year numbers.

The figure, in line with consensus estimates, means annual inflation has now fallen by 1.2 percentage points since November 2011, the ONS said. CPI inflation is now at its lowest level since November 2010. RPI inflation dropped further still, down from 4.8% in December to 3.9% in January - the lowest level since the 3.7% seen in February 2010. Aside from the VAT effect, the largest downward pressures to both measures came from falling tobacco and motoring prices, according to the ONS. The Bank of England's quarterly Inflation Report, published tomorrow, is expected to forecast a...