Inflation falls to lowest rate in four years while house prices reach record highs

UK inflation has fallen to a four-year low of 2.1%.

The rate of inflation, measured by the consumer prices index, fell to 2.1% in November, from 2.2% the month before.

This means that a basket of shopping that cost £100 in November 2012 would have cost £102.10 in November 2013, as the rate of inflation is measured over 12 months.

The figures from the Office for National Statistics (ONS) will ease pressure on the Bank of England as the CPI falls in line with the bank’s target of 2%.

However, recent energy price rises have not been calculated as part of the rate, unlike last year where the rises happened earlier, suggesting inflation is likely to rise again in December when these take effect.

A separate measure of inflation, the retail prices index, stayed the same at 2.6%.

House prices

In a separate publication also released today, the ONS said house prices in London were now higher than pre-crisis peaks.

Prices have risen 12% in London in the year to the end of October, but only 5.5% in the rest of the UK.

Taking out London and the South East, house prices rose just 3.1%.