INFLATION

[Janet]

What is the inflation rate in the UK

[woolley]

The current rate of inflation in Britain is 1.9%. However, the National Institute of Economic and Social Research says that underlying inflation would probably average 1.5 per cent in 2002 but could get lower. The Government requires the Bank of England's Monetary Policy Committee to maintain a 2.5% underlying inflation rate. A rise or drop of more that 1% means an open letter to Chancellor Gordon Brown explaining what has gone wrong and the Bankit is doing to fix it. (Inflation has been below target for 32 of the last 33 months. Britain has an inflation rate lower than in Germany, France and the eurozone average.)