Inflation lowest since Nov 2009

There is good news for the economy after official figures revealed inflation had fallen to a two-and-a-half-year low. The Consumer Prices Index measure of inflation fell to 2.8% in May, from 3% in April.

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Decline in inflation driven by drop in petrol prices

The rate of inflation unexpectedly fell to a two-and-a-half-year low last month, as declining oil prices started to filter through to the petrol pumps.

The average petrol price fell by 4.5p per litre between April and May to stand at 137.1p. Last year, the average petrol price rose 2p to 136.3p.

Inflation has fallen from 5.2% last September due to the waning impact of the VAT hike at the start of 2011 and falling energy, food and commodity prices, easing pressure on squeezed household incomes.

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