A fall in the price of oil saw a 0.7% drop in the cost of goods leaving the UK, figures showed.

The drop was against the figure for October, which had itself seen a 1.0% fall, and suggests the Bank of England is right to predict that inflation is likely to fall dramatically.

This view has led the monetary policy committee to make three successive interest rate cuts, taking 3% off the UK base rate.

Cheaper goods leaving factories should translate into lower priced products in stores and supermarkets, helping struggling businesses and consumers.

But the recent fall in the value of the pound means importers are facing higher costs.