Bank of England Mark Carney governor cautious on inflation rate

The inflation rate dropped sharply last month, to 0.5%, the joint lowest level on record. Tumbling oil and energy costs were the main factors.

The fall in the Consumer Prices Index will trigger a letter of explanation from the Governor of the Bank of England, Mark Carney, to the Chancellor about why inflation has undershot its target of 2 per cent.

Mr Carney told the BBC's Economics Editor Robert Peston the news will be welcome to most people.