INFLATION fell to the Bank of England’s target of 2 per cent for the first time in over four years in December — although unions warned the drop has not eased the cost of living crisis.

The rise in food prices eased to see the consumer prices index (CPI) rate drop to its lowest level since November 2009, when it stood at 1.9 per cent.

The sixth successive monthly drop in inflation has eased pressure on the Bank of England, which would have to reconsider its flagship low-interest rate policies should inflation look likely to spiral out of control.

But unions spoke out against the continued squeeze on ordinary people — a squeeze they say has not been alleviated by the drop in the consumer price index.

Unite general secretary Len McCluskey said: “It masks the grim reality for millions of people who are struggling to meet their everyday bills, as wages are lagging well behind inflation.

“Ministers need to commit to raise the minimum wage by £1.50 an hour and the corporate sector, which has a cash mountain, should heed the call of Confederation of British Industry director-general John Cridland for workers to share in the new-found prosperity.”

Unison general secretary Dave Prentis said that a fall in inflation is only positive news if earnings are keeping pace and the only people whose wages were going up are bankers.

He said: “It is only the financial elite in the City who are looking forward to bumper bonuses this year. The rise in the retail price index to 2.7 per cent shows the underlying cost of living crisis is getting worse.”

Labour will drag ministers to the House of Commons today to call on the government to strengthen the minimum wage and encourage more employers to pay a living wage, as well as introducing higher fines for firms found not paying it and for local authorities to be given enforcement powers.

Shadow minister for trade and investment Ian Murray (pictured) said: “At a time when families are being hit by a cost-of-living crisis, the value of the minimum wage has been eroded since the Tory-led government took office, so we are demanding that the government strengthens the national minimum wage and does more to encourage employers to pay a living wage.”

ryanfletcher@peoples-press.com