UK inflation hits two-year low on falling energy costs

London: British annual inflation hit a two-year low point in January, undershooting the Bank of England’s 2.0 per cent target on falling oil and other energy costs, official data showed on Wednesday.

The Consumer Prices Index 12-month rate hit 1.8 per cent last month, down from 2.1 per cent in December, the Office for National Statistics (ONS) said in a statement.

That marked the first time since January 2017 that the rate has fallen underneath the Bank of England’s official 2.0-per cent target level used to help set British interest rates.

Analysts had forecast a drop to 1.9 per cent.

Inflation was pulled lower by a decline in electricity, gas and motor fuel prices between December and January.

“The fall in inflation is due mainly to cheaper gas, electricity and petrol, partly offset by rising ferry ticket prices and air fares falling more slowly than this time last year,” said ONS inflation head Mike Hardie.