Inflation drops to 3 per cent

The Office of National Statistics has revealed the January inflation rate is at its lowest level since April 2008, down to 3 per cent, from 3.1 per cent in December. The drop follows record falls of 15.2 per cent in fuel prices. The retail price index, which includes mortgage costs, was at the lowest level since March 1960 after the recent interest rate cuts. It was 0.1 per cent in January, down from 0.89 per cent in December, and is expected to enter negative territory, effecting pensions and wages.