The UK inflation rate fell to 3.6% in January, down from 4.2% in December, official figures show
Consumer Prices Index (CPI) inflation in the UK fell to 3.6% last month, according to the Office for National Statistics (ONS), while RPI inflation - including mortgage interest payments - fell to 3.9% from 4.8%.
The ONS said inflation fell sharply as the impact of last year's VAT rise was no longer included in the figures. VAT rose from 17.5% to 20% in January 2011.
Ian Kernohan, economist at Royal London Asset Management, said: "The sharp fall in the rate of UK CPI inflation in January is not a huge surprise, given that last year's rise in VAT has now dropped out of the annual comparison.
"The Bank of England will take some comfort from the fact that their inflation story appears to be panning out as expected, at least in the short term."
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