Lower oil prices push Inflation to lowest level for 12 years

The Office for National Statistics (ONS) reported some good news for consumers today when it revealed that UK inflation figures were stronger than expected for November as the index reached its lowest level since 2002.

The ONS said today that CPI inflation dropped back from 1.3 per cent in October to a better than predicted 1 per cent in November, a 12-year low.

The statistics provider suggested that the falling oil price is in part responsible for the drop: and that transport costs, for motor fuels and air transport – as well as a fall in second-hand car costs – were the main reasons for the monthly slowdown.

Economic analysts are now predicting that inflation could fall “significantly below” 1 per cent in the coming months, as lower fuel and energy costs continue to suppress the headline rate.

It’s thought that the recent 25 per cent fall in oil prices to below $60 per barrel from down from $79 in November may see CPI inflation drop below 0.8% in the coming months.

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