Inflation is nearly half of the 5.2% peak it reached last year. At the Autumn Statement, the Government took more action to help households with the cost of living including a further increase in the tax-free personal allowance and cancelling the fuel duty increase that was planned for January.
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David Cameron said the measure, which will save £4 million by 2020, showed a commitment to his "all in this together" approach.
The party has dropped its opposition to an in/out referendum on EU membership and now supports a vote, acting leader Harriet Harman said.