Rate cut nearer

THE PRICE war among Britain's supermarkets brought another cut in interest rates closer yesterday, by helping to reduce the underlying rate of inflation to its lowest in more than 25 years.

The Chancellor of the Exchequer told the House of Commons Treasury Select Committee that the figure was 'spectacular', but he gave no hints that a base rate cut was imminent. The annual rate of price increases stayed at 1.4 per cent last month, but underlying inflation - which excludes mortgage interest payments - fell from 2.8 to 2.5 per cent.

Non-seasonal food prices fell by 0.7 per cent in November, the biggest monthly fall for 30 years, as the supermarkets fought off competition from one another and from discount warehouses.

Leading article, page 19; Inflation falls, page 37