UK Inflation Falls 2012

The UK consumer prices index has fallen to 4.2% in December, according to the Office for National Statistics.

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The UK consumer prices index has fallen to 4.2% in December, according to the Office for National Statistics.

The consumer prices index is down 0.6% from 4.8% in November. The retail prices index fell to 4.8%, from 5.2% in November.

The 0.6% fall in CPI marks the largest month-to-month fall since November and December 2008, the falls came from downward pressure on petrol, gas and clothing prices. RPI downward pressures came from petrol, oil & other fuels, gas, clothing and footwear.

Both RPI and CPI have fallen markedly since September 2011, when RPI reached a 20-year high of 5.8%, while CPI stood at 5.6%

The Bank of England’s target rate for CPI is 2%. Last month, Bank of England executive director and chief economist Spencer Dale said inflation would fall to around 3% by March 2012.

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