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Petrol prices helps inflation fall to new four-year low

Lower petrol prices helped inflation fall to a new four-year low of 1.7% in February, official figures showed today.

Lower petrol prices helped inflation fall to a new four-year low of 1.7% in February, official figures showed today. Credit: Lewis Whyld/PA Wire

It marks the fifth monthly slowdown in a row.

Petrol prices dropped 0.8p per litre between January and February this year, compared with a 4p rise for the same period in 2013.

Read: Treasury: Falling inflation 'a sign our plan is working'

The Consumer Prices Index rate fell from 1.9% in January as it continued to fall short of the Bank of England's target of 2%, the Office for National Statistics said. CPI has not been lower since October 2009, when it stood at 1.5%.

The fall in inflation to 1.7% was widely predicted and suggests private sector pay growth - which was also 1.7% in the three months to January - has already caught up.

However, total wages are only rising by 1.4%, with ordinary public sector workers seeing a rise of just 0.9%, according to the latest figures.

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Cameron hails 'good news' on economic recovery

David Cameron has hailed the "good news" on economic recovery after the British Chambers of Commerce (BCC) said it believed the UK will grow by 2.8% this year.

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PM: Good news on recovery from @britishchambers. We must stick to #LongTermEconomicPlan to give everyone a more financially secure future.

Read: UK economy 'to hit 2008 peak by summer'

BCC: UK Businesses 'expanding and creating jobs'

The BCC believes the UK will grow by 2.8%. Credit: Stefan Rousseau/PA Archive/Press Association Images

The director general of the British Chamber of Commerce has said that UK businesses are "expanding and creating jobs".

John Longworth said: "Our economic recovery is gaining momentum. Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition."

The BCC expects the first increase in interest rates will happen in the autumn next year - one quarter earlier than previously envisaged, before rising to 1.5% in the second half of 2016. GDP will be 2.5% next year and in 2016.

Read: UK economy 'to hit 2008 peak by summer'

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UK economy 'to hit 2008 peak by summer'

The UK economy will exceed its pre-recession peak by the summer, according to upgraded forecasts from a leading business lobby group today.

File photo of money as the BCC says UK economy 'to hit 2008 peak by summer'. Credit: PA Wire

The British Chambers of Commerce now believes the UK will grow by 2.8% this year and that the second quarter will see gross domestic product climb back to the level seen in the first quarter of 2008.

A year ago amid a much gloomier picture for the economy, the BCC predicted the pre-recession peak would not be reached until 2016, although a number of revisions brought this forward to the third quarter of 2014 in December.

More: Economy growth for Q4 of 2013 unchanged at 0.7%

New multi-million pound fund to help seaside towns

Southend in Essex is one of the areas the new scheme will help. Credit: Nick Ansell/PA Archive/Press Association Images

Ministers have announced a multi-million pound fund to help create jobs and apprenticeships in seaside towns, including areas hit by flooding.

Fifty different projects will share a pot of £27.7m, which the Treasury said would help create 4,000 jobs and 10,000 apprenticeships and training places.

Among the new schemes is a £1.3m project to develop tourism in Southend and a £300,000 investment in a new technology centre in Hull.

Inflation figures to stay where they are for some time

by - Economics Editor

Energy prices used to get the blame for pushing up inflation but not this month.

Small rises from some energy companies were cancelled out by the removal of green taxes.

Read: Fuel bill cuts after Government pledge

Looking at the detail of the components of inflation usually gives some insight in which way the wind is blowing but this month things look to have ground to a halt.

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Prices have fallen for unusual things, whilst upward pressure came from items such as baby wipes and toothbrushes. Credit: Reuters

Prices have fallen for peculiar things like "cultural events" - winter prices are lower at some attractions ­and DVDs.

Upward pressure came from baby wipes and toothbrushes. I¹m not making this up.

Reading the runes in that mix would be very hard except perhaps the very lack of direction tells us that inflation will stay where it is for some time.

More: Puzzling good inflation fall good news for borrowers

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