For the first time in nearly six years, average wages are rising faster than inflation.
Slowly but surely the Consumer Price Index is falling, and inflation is now at the lowest level since 2009. Why does that matter?
Wages should begin to grow with the economy, setting the stage for living standards to improve, but there is a lot of ground to make up.
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%.
The rate of Consumer Price Index inflation fell to a four-year low of 2.1% in November from 2.2% in October, official figures showed.
Today's fall in inflation rate is "welcome", but is still not countering the rising cost of living, Labour's Shadow Economic Secretary to the Treasury has said.
Catherine McKinnell MP blamed David Cameron for prices still rising faster than wages, adding that "with inflation-busting hikes in energy prices in the pipeline families and pensioners will carry on feeling the squeeze."
She cited Labour's proposed energy bill freeze and childcare expansions as measures that David Cameron has opposed.
There's been a surprisingly sharp drop in inflation this morning.
Prices rose by 2.2 per cent in October, down from 2.7 per cent the month before and well below economists' expectations.
The main reasons were a sharp fall in transport costs, mainly motor fuels (for example a drop of 4.9p in petrol in October), and tuition fees.
The latter of these is a mathematical quirk: education costs rose 8 per cent but this was half the rate they were rising a year ago so the comparison contributes to a lower overall inflation figure.
Prices have been rising ahead of wages for years now. It's likely that that trend will be reversed some time next year but today's easing of inflation may bring the end of the squeeze on incomes a little closer.