UK inflation eases

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UK inflation eases

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Annual inflation in Britain fell to its lowest in more than two years in April. It dropped to 3.0 percent from March’s 3.5 percent.

That makes it more likely the UK central bank will be able to introduce extra stimulus – that is essentially printing more money – to support the economy.

Core inflation, which excludes food and fuel costs, fell to 2.1 percent, the lowest since November 2009.

Economists had been expecting a sizeable fall in inflation due to a spike in some prices in April 2011 not being repeated this year.

The Office for National Statistics said the fall was driven by lower inflation for air and sea transport, clothing and alcohol.

Inflation has now been above the Bank of England’s 2.0 percent target for almost two and a half years and Tuesday’s data come a week after the central bank’s economists predicted it would say there for at least another year before falling to 1.6 percent by mid-2014.

Until April, British inflation had fallen more slowly than the BoE expected this year – a factor which many economists said lay behind its decision not to expand its 325 billion pound quantitative easing programme this month, despite the UK economy having fallen back into recession.