Inflation in the Isle of Man dropped by a massive 1.9% last month, hitting its lowest level for two years.

It now stands at 2.8%, with the Treasury attributing the fall in the most part to November’s Bank of England interest rate cut, and the reduction in VAT announced later that month.

What it doesn't include are the two more recent cuts which have put interest rates at their lowest level in the Bank of England's 315 year history.

Treasury Minister Allan Bell (pictured) says with that in mind there should be further falls in the coming months.

He told Manx Radio:

"In the January and February figures we are likely to see a considerable fall in the inflation headline rate as well, based on these actions, plus of course we are still seeing a fall in the price of fuel.

"Food prices internationally are starting to drop and, of course, we've seen very aggresive pricing in the stores over the past few weeks.

"So all these extra reductions in costs are likely to feed through over the next three months and that should see quite a considerable further drop on what is now a much lower figure than the one we were worried about, which was well over six per cent, only some three months ago."

More on Monday's Mandate.