The CPI measure of UK inflation slumped to 0.5% in the year to December, a sharp fall from the 1% November figure reported by the Office for National Statistics (ONS).
Inflation now stands at its lowest level for almost fifteen years when it was also at 0.5% back in in May 2000.
The ONS said the major factors for the fall was due to gas and electricity pricing from 2103 being no longer part of the equation, and also a further drop in prices for vehicle fuel at the forecourts.
This 0.5% figure means that the Governor of the Bank of England must explain to the government why inflation is well off its 2% target.
The last minutes of the Bank of England’s MPC meeting showed that committee members had differing views on future inflation levels, with some predicting it would remain below target for longer, whilst others said there were external risks that could still push it over the 2% level.
The latest Inflation Report (November 2014), predicted CPI would sit below 1% in the next six months, and said it may stay that way for longer than originally anticipated due to the sharp fall in the price of crude oil.
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