The official rate of price inflation, as measured by the Consumer Prices Index (CPI), has fallen to 3% in the twelve months to April 2012.
It fell from 3.5% the previous month, a fall in the rate of inflation that the Office for National Statistics (ONS) attributes in part to the timing of Easter this year.
This latest fall in CPI means that inflation has fallen to its lowest level in over two years.
The Retail Prices Index (RPI) measure of price inflation also fell in April, from 3.6% to 3.5%.
CPI inflation remains at 150% of the government target of 2%, with signs that it is heading in the right direction towards target over the medium term.
Because inflation is now within 1% of the government target, Bank of England Governor Mervyn King will not need to write to the Chancellor George Osborne to explain why the Bank has missed the target.
The Bank of England expects inflation to remain stubbornly high for the remainder of the year, as a result of the “storm” in the eurozone and its impact on the UK economy.
As a historic measure of inflation, as it tells us what happened on average to the price of goods and services over the last year, CPI and RPI are of limited use.
Our individual experiences of price inflation will differ depending on the actual goods and services we consume. People in retirement for example tend to experience much higher inflation than these official figures.
Only last September, CPI was measured at 5.6%, so these latest figures show a significantly lower inflationary environment. Of course these things are all relative, and with wage inflation typically at around half of these level (if pay rises have been awarded at all), the gap between income and expenditure is continuing to decline for many people.
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