UK sees fastest drop in inflation in two years

Annual inflation dropped to 0.5 per cent in December, a fall from 2.7 per cent in November. The plummet represents the fastest drop for non-food prices on the High Street since 2007.

The report, produced by the British Retail Consortium, put the nosedive down to drastic discounting from retailers in an effort to buoy up sales in the run up to Christmas. The Chancellors VAT cut at the end of last year also played a significant part in creating speedy price cuts in December, according to the BRC.