UK inflation falls to 1.9%, below Bank of England's 2% target

UK inflation has fallen to 1.9% in January from 2% in December.

The rate, measured in the consumer prices index, fell below the Bank of England’s 2% target for the first time in more than four years.

Chief Secretary to the Treasury Danny Alexander said that the inflation figures show that the long term economic plan “is working”.

“Inflation falling below 2% for the first time since November 2009 is further evidence that our long term economic plan is working. Controlling inflation and rebuilding our economy are the only sustainable ways to secure living standards for the future,” he said.

According to the Office for National Statistics, the largest downward contributions came from price movements for:

  • Recreation & culture: prices, overall, fell by more between December 2013 and January 2014 than between the same two months a year earlier. The downward contribution mainly came from price movements for recording media (notably DVD films) and recreational and cultural services. In the case of the latter, there was a notable contribution from admissions to cultural events – with decreases to the winter off-peak admission rates at a range of attractions. With the exception of a brief period in 2009-2010, inflation in the recreation & culture sector has been lower than overall consumer inflation over the last 10 years.
  • Furniture, household equipment & routine maintenance: prices, overall, fell by more between December 2013 and January 2014 than between the same two months a year earlier. The downward contribution came from price movements for a broad range of products across the sector.
  • Alcoholic beverages & tobacco: prices, overall, rose by less than a year ago, most notably for whisky where price recoveries following the Christmas period were smaller than a year ago.

The largest and only notable upward contribution came from price movements for:

  • Miscellaneous goods & services: prices, overall, fell by less between December 2013 and January 2014 than between the same two months a year earlier. The upward contribution mainly came from price movements for a range of personal care products (notably toothbrushes and baby wipes) and a range of insurance products.

ONS inflation

Source: ONS

Now read:

Five memes that explain Osborne’s 2014 plan

Chancellor George Osborne unhappy

Related images

  • Rollercoaster economy inflation

Social Bookmarks