Biggest CPI slowdown since 2009: reaction David Miller, partner at Cheviot Asset Management, said: If you strip out higher taxes, energy bills and food prices, Britain's inflation would be about the same as Germany's. As these factors work their way out of the equation over the year, we can expect to see inflation coming down. Indeed extensive discounting by supermarkets has already driven down inflation. The fall in CPI and RPI is confirmation that this is not a re-run of the 1970s - Britain is not going back to the days of endemic high inflation. Marchel Alexandrovich, Jefferies International, said: The figure was bang in line with expectations. This is the beginning of a downward trend that will see inflation fall back towards 3pc by springtime as the VAT rise drops out and energy prices fall. The inflation backdrop will improve going forward which will make it easier for the Bank of England to do more QE in the next couple of months. Chris Williamson, Markit, said: Further falls are likely in coming months, reducing the squeeze on incomes seen last year and therefore providing a much needed boost to economic growth in 2012. The data therefore add support to the Bank of England's expectation that inflation will drop below its 2pc target by the end of the year. Importantly, that should alleviate some of the squeeze on real incomes that was evident throughout last year, which was in turn seen as a key factor holding down consumer spending and adding to the fragility of the economic recovery. However, unemployment - currently at a 15-year high - looks set to rise further in 2012, and widespread job insecurity, low pay growth and uncertainty about future finances mean even those in work are likely to remain reluctant to spend. Philip Shaw, Investec, said: No huge surprises here. The sharp fall in the headline measure is entirely consistent with the MPC's forecast and should help to pave the way for further QE next month. While the targeted measure remains well above 2pc, we do expect an aggressive series of falls through the first half of this year, and whilst we may not see 2pc inflation in 2012, we nonetheless expect subsequent asset purchases to be sanctioned in May as well as in February