Britain's inflation rate slowed more than expected to its weakest rate in five months in November as petrol prices fell, official data revealed today.
The Office for National Statistics (ONS) said consumer prices were flat last month, bringing the annual inflation rate down two-tenths of a point to 2.1 per cent, its weakest since June. Analysts had predicted a rate of 2.2 per cent.
That still leaves it above the Bank of England's 2 per cent target but is likely to encourage expectations that inflation has peaked and will not stand in the way of another interest rate cut in the New Year.
Policymakers may also take comfort from news that RPI inflation - on which many wage deals are based - fell to its weakest rate in three years just before the January pay round.
The ONS said the biggest CPI downward effect came from transport as petrol prices fell this November compared with rises a year earlier. This took off 0.15 percentage points off the annual rate.
There was also a large downward impact from airfares, particularly European routes. But tobacco prices exerted a small upward impact as did beef products.