Inflation to fall below target?

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Inflation was largely lowered by prices for electricity and gas following an Ofgem cap on standard variable tariffs that decreased price increases in that category from 8.1pc to 1.4pc.

Retail inflation declined marginally to 2.05 per cent in January over the previous month on continued decline in food prices, including vegetables and eggs, said government data on Tuesday.

Meanwhile, the top five year fix offers 2.68 per cent from the same bank, or now, 0.88 percentage points beyond the CPI measure.

Figures from the Office for National Statistics (ONS) show the Consumer Prices Index (CPI) fell to 1.8% last month, the largest drop since 2016, from 2.1% in December.

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A fall below the 2% threshold for inflation readings would highlight less room to maneuver for the BOE with regards to rate hikes, so that could see the pound be pressured a little if the actual reading misses to the downside. India imports almost 80 percent of oil it consumes.

We'll have a report on the economic data (and the market reaction)...

"This reinforces expectations of a rate cut in April", he added.

The core measure is now in the process of reversing its 2018 decline to 1.8% and the Bank of England has said repeatedly it expects the index to remain biased toward the upside for some time to come.

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EY Item Club economist Howard Archer said it was "pleasing" news for consumers. It softened to 5.4 percent in January, according to economists at Yes Bank Ltd. and Axis Bank Ltd. Pranjul Bhandari, chief India economist at HSBC Holdings Plc, sees it slowing to as low as 4 percent this year.

"It looks like headline inflation will begin to move towards core", HSBC's Bhandari said.

At the pumps, motorists had lower fuel costs last month, with petrol down by 2.1p per litre on the month to 119.6p. The figures show rural incomes remain under pressure while consumers benefit from easing inflation.

The best one-year cash Isa, offered by Shawbrook Bank, pays 1.74 per cent, meaning locking your money away for a year would still net you a return 0.06 percentage points lower than the CPI.

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This year, other major central banks have also changed to a dovish stance in the face of rising worries about global growth and the impact of the U.S.