The CPI rate of inflation fell from 1.5 % in November to 1.3% in December, ONS reported today.

The wider Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 1.4% in December 2019, down from 1.5% in November 2019.

Both rates are at their lowest levels since 2016.

With poor recent GDP figures some commentators and experts have predicted an interest rate cut this year to boost the economy, with little risk of over-heating inflation.

The biggest contribution to the CPIH 12-month inflation rate in December 2019 came from housing, water, electricity, gas and other fuels. The largest downward contributions came from accommodation services and clothing.

ONS head of inflation Mike Hardie said: “Inflation eased in December as prices for hotel stays dropped. Women’s clothing prices also fell with more items being discounted.

“Annual house price growth picked up with all regions growing apart from the East of England. After almost two years of poor growth, London house prices appear to be showing some signs of improvement.”