Inflation falls to 26-month low of 3%

HIGH street discounting led to the UK inflation rate falling to 3 per cent, its lowest level in more than two years, official figures showed today.

• CPI rate of inflation falls to 3 per cent

• Lowest level since February 2010

• Rate now within one percentage point of Government target

The Consumer Price Index (CPI) rate of inflation fell to 3 per cent in April, compared with 3.5 per cent in March, its lowest level since February 2010, the Office for National Statistics (ONS) said.

In further evidence that the weak economic climate is forcing retailers to cut prices to draw in customers, clothing and footwear prices rose by just 0.2 per cent in the period compared with 1.4 per cent last year.

And softer excise duty rises on alcohol and tobacco, as well as lower air fares due to the timing of Easter, also helped keep a lid on the rising cost of living.

Bank of England Governor Sir Mervyn King narrowly avoided sending his 10th “Dear Chancellor” letter to explain why inflation is higher than the Government’s 2 per cent target, as at 3 per cent it is now within one percentage point of that goal.