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| Version 1 | Version 2 |
|---|---|
| UK inflation declines once again | UK inflation declines once again |
| (19 minutes later) | |
| UK inflation fell in November to 4.1%, official figures have shown, less of a decline than analysts had expected. | UK inflation fell in November to 4.1%, official figures have shown, less of a decline than analysts had expected. |
| The drop in the government's preferred Consumer Prices Index rate compares with 4.5% in October. Some economists had tipped a fall to 3.9% in November. | The drop in the government's preferred Consumer Prices Index rate compares with 4.5% in October. Some economists had tipped a fall to 3.9% in November. |
| The headline rate of Retail Prices Index inflation, which includes housing costs, declined to 3% in November from 4.2% in October. | The headline rate of Retail Prices Index inflation, which includes housing costs, declined to 3% in November from 4.2% in October. |
| Inflation is continuing to fall on the back of lower oil and energy costs. | Inflation is continuing to fall on the back of lower oil and energy costs. |
| However, the CPI rate of inflation still remains above the government's target of 2%. | However, the CPI rate of inflation still remains above the government's target of 2%. |
| As inflation is still more than one percentage point above the target, Bank of England governor Mervyn King will have to write another letter of explanation to the chancellor. | |
| Deflation risk? | |
| Most economists expect inflation to fall still further into the New Year, with some concerned that not only will it go below the government's 2% target, but that deflation could be possible. | Most economists expect inflation to fall still further into the New Year, with some concerned that not only will it go below the government's 2% target, but that deflation could be possible. |
| This is bad for the economy as it encourages consumers to delay purchases in the expectation that prices will soon be lower, worsening any economic downturn. | This is bad for the economy as it encourages consumers to delay purchases in the expectation that prices will soon be lower, worsening any economic downturn. |
| Last week, Chancellor Alistair Darling told the Treasury Committee that he did not see deflation as being a significant risk. | Last week, Chancellor Alistair Darling told the Treasury Committee that he did not see deflation as being a significant risk. |
| The decline in inflation came as the average price of a litre of petrol fell by 9.3 pence between October and November. | |
| However, food inflation continued to rise, with the price of fresh fruit and vegetables being more expensive than a year ago. |