MW: U.K. inflation at lowest in more than 50 years
LONDON--Consumer-price inflation in the U.K. cooled in January to its lowest annual rate in more than 50 years, a further sign of how subdued inflationary pressures are across much of the developed world.
The U.K.'s Office for National Statistics said Tuesday annual inflation slowed last month to 0.3% from 0.5% in December, largely due to a fall in prices for food and gasoline.
January's figure for consumer-price inflation was the lowest since March 1960, the ONS said, when prices fell 0.6% compared with a year earlier.
Inflation is in retreat in many advanced economies, a reflection of feeble demand in parts of the global economy and a sharp tumble in the price of oil.
The European Central Bank in January said it intends to purchase 60 billion euros ($ 68.14 billion) of government bonds and other assets a month in a bid to fuel growth and stoke inflation in the 19 nations that use the euro.
Consumer prices in the currency union fell compared with a year earlier for the second month in a row last month, heightening fears the bloc could experience full-blown deflation, a widespread and persistent decline in prices that stunts growth and makes it harder for governments, firms and households to service their debts.
Such concerns aren't so acute in the U.K., however, where the economy has been growing robustly since the beginning of 2013.
Bank of England officials led by Gov. Mark Carney say they expect the current bout of weak price growth to pass and for annual inflation to accelerate back to the central bank's 2% target by early 2017, according to forecasts published by the BOE last week. Data Tuesday showed that when energy, food and other volatile prices are excluded, "core" annual inflation in the U.K. rose in January to 1.4% from 1.3% in December.
Investors expect the BOE to begin slowly raising interest rates in the first half of next year, provided growth holds up.
The slowdown in inflation gives a boost to Britons' spending power ahead of a general election in May.
Prime Minister David Cameron is hoping the U.K.'s growing economy will help return him to power. But his Conservatives are neck-and-neck in the polls with the main opposition Labour Party, who accuse Mr. Cameron's governing coalition of presiding over a collapse in Britons' living standards since taking office in 2010.
Write to Jason Douglas at jason.douglas@wsj.com and Jon Sindreu at jon.sindreu@wsj.com
