Britain has fought off deflation for another month as the
Retail Price Index (RPI) measure of inflation fell by less than expected, declining from an annual rate of 0.1 per cent to just 0 per cent, it was announced this morning.
The Consumer Price Index (CPI) gauge of inflation unexpectedly rose, however, to 3.2 per cent, forcing Mervyn King, the Bank of England's Governor, to write another
letter to the Chancellor to explain why inflation is so far above the 2 per cent target.
CPI was up from 3 per cent in January, confounding expectations that it was set to tumble after falling sharply from a peak of 5.2 per cent in September. Official figures reveal that consumer prices were driven up by rising food costs, which observers blamed on the weakness of the pound.