The Office of National Statistics (ONS) announced that inflation has dropped to 4.2% from 4.8% for the month of December, in line with government expectations and a full 1% lower than three months back.

The target level is 2% and there is a chance that this could be achieved very close to the end of 2012. No doubt the recent cuts in electricity prices for the UK consumer of around 5%, will feed through in the near future.

A pre christmas supermarket price war, lower clothing prices and reduced fuel costs have all played their part in this good news, ahead of the UK unemployment figures due to be released a little later, that may well spoil the party a little.