British inflation falls in October as oil and food price come down

Business Materials 18 November 2008 15:49 (UTC +04:00)

Inflation in Britain fell to 4.2 per cent in October from 5 per cent in the previous month, the Office for National Statistics (ONS) said Tuesday.

The fall in the Retail Price Index (RPI), a measure that takes into account housing costs, was the first since 2003, reported dpa.

The drop was in line with expectations as prices for food and fuel fell over the past few month, analysts said. However, the inflation rate is still well above the official upper target of 2 per cent.

The Bank of England said in a report last week that inflation could fall below its target of 2 per cent in 2009, and could fall as low as 1 per cent.

The fall in inflation prompted the Bank of England on November 6 to cut interest rates sharply from 4.5 to 3 per cent.