The Consumer Price Index fell to 2.0% in December, in line with the Bank of England's target for the first time since November 2009. This continues the downwards trend we have seen in inflation since June 2013.
According to ONS, the largest contributions to the fall in the rate came from prices for food & non-alcoholic beverages and recreational goods & services.
There was a small upward contribution to inflation from energy bills, as the increase in gas and electricity prices in December 2013 was slightly larger than the increases a year earlier.
Looking ahead to 2014, although energy prices should keep CPI around the 2.0% mark for the time being, inflation is likely to dip below-target over the course of the year as spare capacity in the economy makes itself felt. We expect inflation to average 1.7% over the year.