Inflation dropped to its lowest level in more than three years last month, boosting the chances of a cut in interest rates from the Bank of England.
The Consumer Prices Index — the key yardstick of rising household costs — fell from 1.5 per cent to 1.3 per cent, a rate last seen in November 2016.
The unexpected drop came two days after official GDP figures showed the economy contracted by 0.3 per cent in the same month, which was overshadowed by the general election campaign.
Ruth Gregory, of Capital Economics, said: “Everything now depends on the economic news over the coming weeks. If the data fail to improve, interest rates could be lowered as soon as January 30.”
