Industry NewsUK inflation fell to 4.2 per cent in December as result of slowing energy prices, the Office for National Statistics (ONS) has reported. The cost of living had been increasing at the rate 4.8 per cent the previous month. The strong downward pull of energy was mitigated by stronger phone costs. As well as being a strong economic signal, inflation figures have a direct impact on regulated utility costs such as water and electricity distribution.
The Consumer Price Index (CPI) rate for December represents the third month of reductions. Inflation had past 5.0 per cent in September, but had since been easing back. The scale of the reduction month-on-month has been the largest since the end of 2008. The ONS indicated that the main factors behind the drop were lower petrol, gas and clothing costs. Despite the reductions, inflation remains above the target of 2.0 per cent set for the Bank of England.