Today's fall in the inflation rate to the Bank of England's target of 2.0% is welcome news for its governor Mark Carney.
A fall in inflation may prove to be merely temporary. But it is a welcome boost to the incoming Governor of the Bank of England Mark Carney.
Inflation is stuck at 2.7% for the third month in a row and there are signs it may actually rise in months to come.
Inflation is set to dip below the Bank of England's 2% target for the first time in more than four years, because retailers have slashed prices alongside lower fuel costs.
Many economists believe official figures today will reveal a fall in the Consumer Prices Index (CPI) to 1.9% last month from 2% in December, which will mark the first time inflation has dropped below the target since November 2009.
It follows last month's aggressive discounting by food and general merchandise retailers, with high streets seeing widespread deflation.
ITV News Deputy Political Editor Chris Ship has tweeted:
Given we are still waiting on Low Pay Commission for its recommendation on Minimum Wage - Osborne's words mean nothing. Positioning. Is all
Is Low Pay Commission's job to advise on how far Min Wage can rise without affecting employment. Due mid-Feb. Osborne trying to get credit
The minimum wage could rise to £7 an hour by 2015, Chancellor George Osborne has told the BBC. Osborne said the "economy can now afford" an above-inflation rise. The current minimum wage stands at £6.31 for people aged over 21.
It's welcome news that inflation is down & on target. As the economy grows & jobs are created this means more security #forhardworkingpeople
The Office for National Statistics tweeted:
The rate of Consumer Price Index inflation fell to the Bank of England's 2% target in December from 2.1% in November, official figures showed today.
As inflation falls to a four-year low, Business Editor Laura Kuenssberg highlights the rise in house prices over the past year, according to official statistics:
ONS says London house prices up 12 pc, 3.1 pc across UK btw Oct 12 and Oct 13
Inflation fell to a four-year low of 2.1% in November as the rise in the price of food eased.
The Consumer Prices Index rate (CPI) has not been lower since November 2009, when it stood at 1.9%.
The figures from the Office for National Statistics (ONS) will ease pressure on the Bank of England as it brings inflation closer to its 2% target.
One reason behind the decline is that large rises in household energy bills have yet to take effect.But the sting in the tail is that these are likely to make a large upward contribution in December's figures.
The headline rate of Retail Price Index inflation remained unchanged at 2.6%.