London — British inflation fell to a two-year low in January, dipping below the Bank of England’s target and offering some relief to householders who have tightened their belts ahead of Brexit. Consumer prices rose at an annual rate of 1.8% in January after a 2.1% increase in December, the Office for National Statistics (OFS) said on Wednesday. A Reuters poll of economists had forecast 1.9%. British consumers have been pressured by inflation after a slump in sterling of more than 10% against the dollar and euro since the Brexit referendum in June 2016. Inflation peaked at a five-year high of 3.1% in November 2017, when British households faced much greater price increases than the EU average. That difference is now negligible, but economists say higher inflation could return in the event of a no-deal Brexit. “The further falling back in inflation facilitates the Bank of England maintaining a ‘wait and see’ approach on interest rates until after the UK leaves the EU,” Howard Archer, ...
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