Inflation rate expected to fall sharply and remain negative after hitting 11-year low

THE rate of inflation is expected to fall sharply over the coming months after hitting the lowest level in 11 years in December.

Tumbling oil prices and falling mortgage repayments meant the rate of inflation hit 1.1% in December, down from 2.5% in November and a high of 5% in June.

Consumer prices have now fallen by an average of 2.3% in three months, which is the largest quarterly fall in the cost of living for 61 years.