Support 100 years of independent journalism.

  1. Business
  2. Economics
20 March 2012updated 26 Sep 2015 8:02pm

Chart of the Day: Inflation falls

CPI and RPI both drop by 0.2 points

By New Statesman

Thanks largely to lower water, gas and electricity bills, inflation in the UK continued to fall in February, according to new figures released by the Office for National Statistics (ONS).

The consumer price index (CPI) – a measure used to gauge inflation rates across the European Union – dipped in the UK to 3.4 per cent last month, a decrease from 3.6 per cent in January. The Bank of England’s target for inflation is 2 per cent on the CPI measure.

A large upward effect came from food and non-alcoholic beverages, clothing and footwear, furniture and household equipment.

The CPI stands at 121.8 in February 2012 (based on 2005=100).

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s global affairs newsletter, every Monday and Friday. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A weekly dig into the New Statesman’s archive of over 100 years of stellar and influential journalism, sent each Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy

The retail price index in the UK was 3.7 per cent in February, a decrease of 3.9 per cent. This was mainly due to downward pressures from fuel and light and motoring expenditure, while upward pressure came from alcoholic drinks.

The all-goods index is 189.9 in February, up from 186.7 the previous month. The RPI stood at 239.9 in February (based on January 1987=100).

David Page, an economist at Lloyds told the Financial Times:

We are no longer especially confident that inflation will slow back to, never mind below, the Bank of England Monetary Policy Committee’s 2 per cent target over the medium term.

Sylvia Waycot of the financial information service Moneyfacts told the BBC:

It’s just a bit too early for everyone to burst into a chorus of ‘Don’t worry, be happy’, as today’s figures still mean that there are only 79 accounts out of 1,126 that negate both inflation and the taxman’s cut.