FTSE 100 recovers in early trading

Tuesday 16th June 2009, 9:53AM BST.

FTSE 100 recovers in early trading Inflation has fallen back to 2.2 per cent, a smaller fall than expected and still above the Bank of England’s target of two per cent.

The consumer price index (CPI) as measured by the Office for National Statistics (ONS) fell for the eighth month in a row to 2.2 per cent, from its peak of 5.2 per cent in September.

Inflation is now at its lowest since January 2008.

The retail price index (RPI), which takes mortgage repayments and housing costs into account, eased slightly rising to -1.1 per cent in May, from -1.2 per cent in April.

A sharp drop in food, electricity bills and the costs of renting private property helped push inflation lower, while higher prices for televisions and DVDs compared to last year slowed the rate of decline.