Inflation falls below 2 percent in Britain

July 14, 2009 at 5:19 PM
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LONDON, July 14 (UPI) -- Inflation fell below the Bank of England's 2 percent target for the first time in nearly two years, economic officials said.

The Consumer Price Index fell from 2.2 percent in May to 1.8 percent in June, the first time it has been under 2 percent since September 2007, The Times of London reported Tuesday.

Bank officials said the inflation figure was in line with expectations, prompting forecasts that interest rates would remain at 0.5 percent for the foreseeable future.

Official figures show the Retail Price Index, including housing costs, fell from minus-1.1 percent to minus-1.6 percent, fueled by steep drops in mortgage costs, the Times said.

The Bank of England said it expected CPI inflation to maintain its decline in the coming months before stabilizing at below 1 percent.

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