UK inflation rate falls to 2.2%

UK inflation has dropped to its lowest level since September 2012, with the Consumer Price Index (CPI) coming in at 2.2%, significantly lower than the 2.7% economists had predicted.

The fall will be a small relief for many families over Christmas, with the Retail Price Index, a broader measure of inflation, also coming in lower than expected.

The drop in inflation was attributed to lower prices at the petrol pumps, lower air fares and cheaper second hand cars, among other price-drops, according to the Office for National Statistics.

The UK’s core inflation rate, which excludes food, tobacco, alcohol and energy, came in at 1.7%, the lowest rate since 2009.

In a statement, the Treasury said: “Inflation has fallen to well below half of its peak of 5.2%. With the help of the ongoing freeze in fuel duty that has kept petrol prices 13 pence per litre lower than they otherwise would have been, petrol prices are now at their lowest level since July 2012.

“Britain’s hard work is paying off and the country is on the path to prosperity. Thanks to the government’s long-term economic plan, all parts of the economy are growing, the deficit is falling and jobs are being created - and that’s the only sustainable way to raise living standards for hardworking families.

“But times remain tough for many people so wherever possible we have found the money to freeze fuel duty, freeze council tax and take 2.7 million people out of tax by increasing the tax free personal allowance.”

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