The drop should mean a noticeable slowing

INFLATION fell back at its sharpest rate in three years yesterday and is expected to continue to drop for the rest of the year, signalling a welcome relief for cash-strapped consumers cheapguccioutlet2012.com.

But the reduced Consumer Price Index figure of 4.2 per cent for December – down from 4.8 per cent the previous month – is still well above the government’s target figure of two per cent, forcing Bank of England governor Sir Mervyn King to write a letter to the Chancellor to explain the situation for the 25th consecutive month.

“The decrease in inflation was driven mainly by falls in the prices of petrol and clothing, and gas prices which were unchanged in December compared to a rise last year,” said Daniel Solomon, economist at think tank Cebr.

“The Bank of England predicts that consumer price inflation will fall well below the two per cent target by the end of 2012.”

The drop should mean a noticeable slowing in the spiralling price of fuel, energy bills and food for shoppers. Cheap gucci outlet 2012 - designer bags, cheap shoes, fashion sunglasses, luxury watches online.

Howard Archer, chief UK economist at IHS Global Insight, said he expected the Bank to deliver another £50 billion of quantative easing in February, with another £50bn likely to follow in the second quarter, as a consequence of the falling inflation level.