Inflation falls for fifth consecutive month
Annual inflation has fallen from 1.9 per cent to 1.7 per cent in February, according to the latest figures from the Office for National Statistics.
That's a 52-month low, and a dramatic fall from 2.9 per cent last June.
The latest figure "is now clearly below the Bank of England's two per cent target rate", says Howard Archer, chief UK and European economist of IHS Global Insight.
Now with headline earnings improving to 1.7 per cent in January, Archer says that this is the first time since early 2010 that inflation has not been above earnings growth.
IHS sees consumer price inflation remaining modestly below two per cent for the next few months, and for it then to hover around that level further out this year.
Jeremy Cook, chief economist at World First, says that "the context of 49 months of above target readings beforehand should stay any issues of extreme disinflation."
The pound rose slightly against the dollar on the news, with sterling at $1.6503 immediately after the release.
Gap between inflation & wages is narrowing, but real wages still falling (eg earnings rising slower than CPI) pic.twitter.com/hI5WzhMj2e
— Ed Conway (@EdConwaySky) March 25, 2014