Inflation slows by more than expected

Inflation in the UK decreased by 0.5 percentage points last month, according to new official data.

Figures from the Office for National Statistics revealed the Consumer Prices Index (CPI) declined to three per cent in February, down from the 3.5 per cent figure recorded in January.

The dip was greater than analysts had expected, with the general consensus being the drop was to be 3.1 per cent.

This is likely to increase hopes that inflation peaked at the start of the year and will be below the Bank of England target of two per cent by the end of 2010.

However, those looking to generate returns from their personal wealth may not see interest rates rise in the near future, as David Kern, chief economist at the British Chambers of Commerce, said it ’would be wrong for the [Monetary Policy Committee] to contemplate early interest rate rises’.

Duncan Higgins of Caxton FX noted the pound has fallen as a result of the news, with the pound dropping below €1.11.ADNFCR-2318-ID-19683902-ADNFCR