Fuel bills set to fall in line with in­fla­tion

Midweek Sport - - NEWS -

THE rate of in­fla­tion fell to a 14-month low last month and is ex­pected to hit the Gov­ern­ment’s two per cent tar­get by the end of the year in a fur­ther sign that the con­sumer spend­ing squeeze is loos­en­ing its grip.

The con­sumer prices in­dex (CPI) rate of in­fla­tion fell to 3.6% last month, from 4.2% in De­cem­ber, as the pre­vi­ous year’s VAT hike from 17.5% to 20% fell out of the year-onyear com­par­i­son.

In a let­ter of ex­pla­na­tion to the Chan­cel­lor, Bank of Eng­land gov­er­nor Sir Mervyn King said fur­ther falls in petrol and util­ity prices are on the way.

He added: “The ef­fect of the fac­tors that tem­po­rar­ily pushed up in­fla­tion is now wan­ing.”

Econ­o­mists warned the softer cost of liv­ing is likely to weigh down on wage growth.

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