Prices and Wages

Inflationary pressures cooled over the latter months of 2013, with CPI inflation finally moving back to the 2% target for the first time in four years in December. The slowdown in inflation was largely a function of base effects; big rises in food prices in the autumn of 2012 were not repeated last year and increases in domestic energy bills, while still very large, were also lower than in the previous year. In addition, the impact of higher university tuition fees was smaller in 2013 than in 2012, which also helped to slow inflation a little…