Economists tip inflation to fall to 0.5% in 2013

Leading economists have predicted the UK's main inflation rate will fall as low as 0.5% next year.

Forecaster Capital Economics said the Consumer Prices Index (CPI) inflation rate could fall 1.5% below the official target of 2% because of the impact of falling oil prices and low economic activity. Roger Bootle's firm said in a note the near-term inflation outlook had improved recently, with CPI falling to 2.8% in May, the first time it has been below 3% since late 2009. Capital Economics expects it to continue to fall sharply, possibly reaching a low of 0.5%. It said: "It will come under further downward pressure from the recent drop in oil and petrol prices. And we still expect...