The rate of inflation in the UK has continued to slow, the Office for National Statistics (ONS) has revealed.
According to the body's most recent findings, the consumer prices index rate was at 3.1 per cent in December, one per cent lower than the previous month.
The ONS attributed much of the reduction to the government's value added tax cut, adding that petrol prices also played a role.
Interest rates for secured loans could be set to fall in the future should the rate continue to slow, as the threat of deflation is one of the factors the Bank of England considers when making cuts to the official base rate.
The Bank's decision to reduce the rate was cited by the ONS as a major reason the retail prices index also fell in December - this figure seeing its largest drop since 1980 as it fell from three per cent to 0.9 per cent.
Earlier this month the base rate was reduced from two per cent to 1.5 per cent.
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