Inflation fell for the sixth month in succession in March paving the way for an end to the prolonged squeeze on wages, official figures showed today.

The Consumer Prices Index (CPI) rate dropped to a new four-year low of 1.6%, from 1.7% in February, according to the Office for National Statistics (ONS).

It comes a day ahead of separate ONS labour market statistics which are expected to show that regular pay is rising at a rate of 1.8%, up from 1.3%.

Loading article content

CPI has not been lower since October 2009, when it stood at 1.5%. The latest fall in inflation was widely expected by economists.

It is likely to herald an end to a six-year period when pay growth has been lagging behind the rise in the cost of living, effectively shrinking workers' spending power.