This has also helped cool headline inflation from above 8% levels as recently as in September.
However, the overall rate of headline inflation continued to fall at an annual rate of 0.8%.
Thanks to rising oil prices, headline inflation may exceed 3% this year for the first time since 1996.
Orlova still expects headline inflation to fall to 7.7% by September and remain flat in the remainder of 2011.
Other than headline inflation coming down thanks to a flat-lined economy, products like beer and food have been rising.
Headline inflation is currently at 2.2%, comfortably below the target of 2.5% the government has set for the MPC.
Headline inflation rose 6.84% from a year earlier, compared with January's 6.62% increase.
While headline inflation remains high, core inflation has come down and is likely to remain soft in coming months.
This month headline inflation stayed flat, while core prices rose a paltry 0.1%.
On a yearly basis, headline inflation fell slightly to 3% in December, while the core reading was unchanged at 2.2%.
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Headline inflation has already been high, and core inflation usually catches up.
It is very abnormal for bond yields to trade below headline inflation.
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The persistent strength of commodity prices helps to explain why headline inflation rates have been stubbornly high in many countries, despite their struggling economies.
The zone's headline inflation rate has stayed stubbornly above 2% in the past year, although core inflation (which excludes energy and food) is now 1.8%.
Complicating prospects for a future rate cut, headline inflation will likely go above 3.5% year-over-year by November, with more possible due to gasoline price hikes.
The rising cost of petrol pushed the headline inflation rate in the UK up to 3.3% in June - its highest level for nearly two years.
Some Fed officials are uncomfortable that interest rates are so low when headline inflation is at 5% and the economy is still growing at a decent rate.
Although headline inflation has doubled over the past year, to 3.2%, much of the rise has been due to the trebling in oil prices since early 1999.
There is evidence that rises in headline inflation tend to spill over into wages faster in Europe than in America, because of its less flexible labour markets.
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The fall in oil prices since August has been a great help, at a stroke both bringing down headline inflation rates and boosting the incomes of consumers.
An energy-driven headline inflation rate of 3% hardly spells disaster.
Higher oil prices certainly push up the headline inflation rate.
In recent months year-on-year headline inflation rates in most of the world's big economies have been negative, largely because oil prices have been far below the heights of mid-2008.
Headline inflation is going to rise further in March and April, and sadly that will see too many doom and gloom rate hike hawkes get too much air time.
Since the recent fall in headline inflation is largely due to lower prices of tradables, including commodities, with service inflation still running around 8.2 percent year over year in July.
Headline inflation in India fell below 5% in April, reaching the Reserve Bank of India's "comfort zone" for the first time in more than three years, financial daily Business Standard reports.
At the same time, wages and salaries grew 0.4% in July, in line with headline inflation (up 0.4%) which translates, along with other variables, to a 0.1% decline in real disposable income.
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Second, the headline inflation rate, currently 3.7%, is expected to fall sharply in the next few months, as last summer's rises in indirect taxes and mortgage rates drop out of the calculations.
Headline inflation has fallen to 3.2%, from its high of 4.0%, and the ECB has said it should fall to its target rate of 2.0% by the end of the second half of 2009.
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