For the first time in a year the annual rate of inflation measured on the CPI index dropped below 3%, dropping from 3.2% to 2.9%.

The main contributor to the fall in inflation was lower energy costs, which contributed to a drop in the rate of inflation for housing and household service and for transport.

Cucumbers too played their part, apparently, as the rate of food cost inflation fell.

However the rate remains well above the 2% target and there are signs that inflation is proving rather more stubborn than some expected.

But the fall will ease concerns in some quarters over inflationary pressures and worries that the Bank of England may have to raise interest rates rather swifter than some would like.

And certainly some economic experts, CEBR for instance, expect the Governor of the Bank of England to be obliged to write a letter to the Chancellor later this year explaining why inflation has undershot the target range.

So, there is definitely some comfort for those active in building and selling homes.

Meanwhile, of interest to economic historians is that on the old inflation measure of RPI Britain experienced deflation for the first time in almost 50 years.

That was down to the massive drop in the cost of housing, which is a major part of the RPI basket, as a result of the plunging mortgage payments. The average mortgage payment has fallen by more than 40% year on year.

For that reason not too much should be read into the RPI figure in regards to the longer term track of inflation.

For me what remains the biggest uncertainty and what may well define the shape of the inflationary curve – once the downward influence of falling fuel prices has passed through the system – is the price of sterling and how the increased costs of imported goods feed through.

There is already some evidence in the figures that the disinflationary effect that had been provided by the falling cost of imported clothes, footwear, toys and games is reversing.

Small beer maybe, but I think it is probably too early to dismiss the threat of inflation and consequently too early to be complacent about the level of interest rates.

On this note it was interesting to read the comments made by Bank of England MPC member Andrew Sentance in his speech on “Monetary policy in turbulent times” this morning.

He says: “The recent data suggests that the downward momentum of inflation in the short-term may not be as strong as we thought in February – probably because of the very marked depreciation in sterling since the summer of 2007.

And he adds later: “At present, the key challenge is to support demand and help lift the economy out of recession and head off the deflationary risks associated with that. I am hopeful we can achieve that as we move through this year and into 2010.

“When the recovery comes, there may be different challenges for monetary policy, including upside as well as downside risks to inflation.”