January inflation falls below 2% target for the first time in four years

Data from the Office for National Statistics (ONS) concluded that inflation was pulled down by price movements across DVDs, furniture, alcoholic drinks and other goods and services.

The ONS said the strongest downward movement came from price changes across recording media and DVD films in particular.

Prices for furniture, household equipment and maintenance slumped further in January this year than last year while alcoholic drinks and tobacco prices increased at a slower rate than at the same time a year ago.

The upwards movement came from price increases across a range of personal care products such as toothbrushes and baby wipes.

Prime minister David Cameron tweeted that the figures support the government’s economic strategy.

“Today’s fall in inflation is more evidence our long term economic plan is working. We want to ensure a secure future for hard-working people.”

Conlumino managing director Neil Saunders said: “Taken in concert with a number of other economic indicators, including a strong uptick in consumer confidence and some evidence of a slight increase in wage settlements, this forms part of a wider basket measures which point to a more positive outlook for retail.

“Although prices increases are moderating now, there could be a slight inflationary push later in the year arising from the recent flooding which has already affected thousands of acres of farmland and could, if the situation does not rapidly improve, have a negative impact on UK food supply. Moreover, insurance premiums are also likely to rise over the medium term. That said, neither of these factors is likely to have a severe impact.”