Inflation dips to 15-month low of 3.4%

LOWER energy bills helped pull the overall rate of inflation down to a 15-month low of 3.4 per cent last month, official figures showed today.

The consumer prices index (CPI) rate of inflation was down slightly from 3.6 per cent in January, the Office for National Statistics (ONS) said, as E.ON and Scottish Power cut their tariffs.

Cheaper air fares and discounts on digital cameras also pulled the CPI rate lower, but a record January to February rise in alcohol prices, driven by spirits, held back further declines.

The drop comes as some economists warn that the overall rate of inflation may not pull back as quickly as previously thought amid resurgent oil prices, although the ONS said there was no evidence of this in February.