British inflation drops as shops offer discounts

BRITISH inflation slipped in February after shops offered discounts on clothes, toys and electronic goods, suggesting the Bank of England has time to wait before it raises interest rates again.

Consumer prices rose 1.3% from a year ago last month, down from January’s 1.4% increase, the British government’s National Statistics office in London said. The gain was the same as that recorded in November and December.

Inflation has remained below the bank’s 2% target rate since May 1998. While the bank predicts inflation will rise to the target within two years, some economists including David Page at Investec Bank UK Ltd said prices may rise more slowly than policy makers predict.