Rate of inflation drops to 3%

Inflation has dropped to its lowest level since last April thanks to fuel prices falling at the fastest pace on record, official figures show. The key Consumer Prices Index (CPI) measure of inflation dropped to 3 per cent from 3.1 per cent in December, with falling car and transport prices also acting as a drag, the Office for National Statistics (ONS) said. But the fall was far lower than expected by economists as January sales on the high street failed to see the same level of heavy discounting as last year. The underlying rate of Retail Prices Index (RPI) inflation fell to 2.4 per cent in January from 2.8 per cent in December. The headline rate of RPI inflation, which includes mortgage interest payments, fell to 0.1 per cent in January from 0.9 per cent in December.