Rate of inflation expected to drop

The rate of inflation is expected to drop to its lowest level in two years, in a sign that the pressure on cash-strapped households has started to ease.

The consumer prices index (CPI) rate of inflation is forecast to drop to 3.5% in January, from 4.2% in December, as the previous year's VAT hike from 17.5% to 20% fell out of the year-on-year comparison.