* The good news keeps coming in for the UK economy. Last week
inflation dropped to 1.7%, the lowest level in four years, down
from a peak of 5.2% in late 2011.
* Falling inflation will come as a huge relief to the Bank of
England. Not only has inflation been above the Bank's 2.0%
target for most of the last six years, the UK has had the
unfortunate distinction of being one of the industrialised
world's highest inflation nations in recent years.
* High inflation has been driven by buoyant commodity and energy
prices, a weak pound and increases in indirect taxes. Today all
three factors are unwinding.
* Global commodity prices have dropped by about 20% in the last
three years. In 2010 UK transport costs were rising by over 10%
year on year. Today they are falling.
