Inflation eased in November for a second successive month, chiming with Bank of England forecasts and bolstering expectations the central bank will have scope to provide additional stimulus to the sluggish economy next year.
Slower growth in food, transport and clothing prices helped push down annual consumer price inflation to 4.8 percent, in line with analysts' forecasts and its lowest since August, the Office for National Statistics said on Tuesday. In October inflation eased for the first time since June, to 5.0 percent.
The Bank of England has forecast that weak economic growth will push inflation below its 2 percent target by the end of 2012, leading most economists to believe the Bank will inject an extra 75 billion pounds into the faltering economy in February, when its current asset purchases are completed.
The latest evidence of falling inflation reinforces that view, economists said.
The Bank of England has been arguing for some time that consumer price inflation will fall back sharply once temporary upward pressures wane, said Howard Archer, analyst at IHS Global Insight.
As such, further quantitative easing by the Bank of England looks ever more inevitable early in 2012 to try and boost the struggling economy.
Gilt futures briefly extended gains after the data.
Earlier on Tuesday Bank chief economist Spencer Dale said that inflation is likely to fall to just over 3 percent by March, but added that the inflation path after that will be key for the future course of monetary policy.
The biggest downward pressures on annual inflation came from food and non-alcoholic beverages prices, which rose at the slowest pace since July 2010, as well as from transport, clothing and furniture prices, the ONS said.
The largest upward contributors were alcohol and tobacco.
Prices of electricity, gas and other fuels rose at an annual 20.9 percent, the fastest pace since February 2009, as energy companies had now passed through all the planned price rises, the ONS said.
The retail price inflation gauge, which includes more housing costs and is the benchmark for many wage deals, fell to 5.2 percent from 5.4 percent, above forecasts for a dip to 5.1 percent.
(Reporting by Olesya Dmitracova and Keith Weir; Editing by Susan Fenton)