Falling petrol and oil prices helped the annual underlying rate of inflation in Britain to ease slightly in May, official data showed today.
The figure, which excludes mortgage interest payments, fell 0.1% to 2.9% after spending the previous three months at 3%. Inflation has now been above the Government's 2.5% target for seven months in a row.
As well as cheaper oil products following the end of the Gulf War, weaker house price rises than a year ago and smaller increases in the costs of foreign holidays than last May added to the downward pressure on inflation figures.
There was also a fall in the Harmonised Index of Consumer Prices (HICP), which Chancellor Gordon Brown said last week he wanted to adopt for the Bank of England's new inflation target. HICP stood at 1.2% - the lowest since September - following a fall in the annual rate from 1.5% in April.
The HICP, which is the favoured measure in the euro zone, does not include housing costs and smoothes out fluctuations. Mr Brown sees its adoption as a key part of the UK's preparations for entry to the single currency.
In the retail prices measure, the Office for National Statistics said the headline figure, including mortgage interest payments, stood at 3%, down from the 3.1% annual rate seen in April.
A further downward effect was created by tobacco prices as the later Budget in 2002 meant duty rises fed through to May prices compared to April this year.
The largest upward effect in today's figures came from seasonal food prices after bad weather affected European crops. Prices of fresh vegetables also fell by less than a year ago.
