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"We're going to see inflation drop very sharply over the next six months"
- David Tinsley, chief U.K. economist at BNP Paribas SA
U.K. year on year inflation slowed in December to its weakest pace in six months, easing pressure on consumers. Consumer prices gained an annual 4.2 per cent, said the Office for National Statistics on Tuesday.
"We're going to see inflation drop very sharply over the next six months, which is quite good news from the point of view of the broader economy in terms of supporting consumer spending," said David Tinsley, chief U.K. economist at BNP Paribas SA in London.
"It's still the case that there's plenty of scope for more monetary loosening, or more quantitative easing."
"Further falls are likely in coming months, reducing the squeeze on incomes seen last year and therefore providing a much-needed boost to economic growth in 2012," said Chris Williamson, analyst at Markit.
"The data therefore add support to the Bank of England's expectation that inflation will drop below its 2% target by the end of the year."