Britain's disgruntled pensioners are likely to receive a £2 increase in the basic state pension next year as a result of the increase in the rate of inflation over the past year, according to figures released yesterday.
Next April's rise will be around three times as high as last year's 75p-a-week adjustment - decried as miserly and insulting by pensioners' lobbying groups.
Although the latest data from the office for national statistics showed that last month's petrol price war shaved the annual inflation rate from 3.3% to 3%, the increase in energy costs over the past year will help to give the elderly a slightly bigger weekly increase.
State pensions are uprated each year in line with the September rise in headline inflation. Although that figure will not be known until next month, the recent jump in oil prices should help to keep inflation at around its current level.
Last month's fall in the head line rate was accompanied by an easing in the underlying rate - which excludes mortgage interest payments - to 1.9%, equalling its lowest level since the series began in 1975.
Ferocious competitive pressures in the high street meant that the government's preferred measure on inflation came in below its 2.5% target for the 17th successive month. Analysts said that the benign state of cost pressures shortened the odds on the next move in interest rates being down, though some warned that the Bank of England might be concerned at the inflationary implications of sterling's fall to a 14-year-low against the dollar.
Using the European Union's method for calculating the cost of living - the harmonised index of consumer prices - Britain's inflation rate remains comfortably the lowest in the EU.
Britain has an HICP inflation rate of 0.6%, compared to 1.3% for the next lowest country, Sweden, 2.2% for the EU on average and 5.9% for the worst performing country, Ireland.
