Cameron welcomes inflation fall to 1.9pc

The rise in food prices eased to see the Consumer Prices Index (CPI) rate drop to its lowest level since November 2009, when it stood at 1.9 per cent.

Today’s figure from the Office for National Statistics (ONS) beat expectations that there may be a small rise from November’s 2.1 per cent figure, spurred by gas and electricity price hikes.

But while steep increases did have an upward impact, many of the tariff rises had not yet taken effect when the latest data was collected.

The sixth successive monthly drop in inflation eases pressure on the Bank of England – which would have to reconsider its flagship low interest rate policies should inflation look likely to spiral out of control.

The return to the two per
cent inflation target was welcomed by Prime Minister David Cameron.

In a message on Twitter, Mr Cameron said: “It’s welcome news that inflation is down and on target. As the economy grows and jobs are created this means more security for hard-working people.”

The latest drop is a further decrease after inflation reached a four-year low last month.

Inflation last met its two
per cent target – rather than hovering above or below it – in April 2006.

The latest figures showed the usual month-on-month rise in the cost of food and alcoholic beverages from November to December was the smallest it has been since 2006.

It meant the annual rate of inflation in the sector slowed to 1.9 per cent, the lowest rate since May 2010, indicating an easing in the usual pressure on household Christmas budgets.

Main downward contributions to this came from fruit and meat, while the price of fish was lower in December compared with November.