By Andrew Hay

MADRID
SPANISH inflation fell to a 40-year low in December, as a severe economic slowdown coincided with sharp drops in food and commodity prices.
Spain's 1.4 percent year-on-year consumer price growth was below a Reuters forecast of 1.5 percent, and down a full percentage point from 2.4 percent in November, according to final data from the National Statistics Institute yesterday.

That was the lowest rate since June 1969 when the level stood at 0.5 percent, according to government figures.
Spanish inflation has now fallen for five straight months, after hitting a peak of 5.3 percent in July, and is at its lowest level since January 1999 when it stood at 1.4 percent.

The numbers followed German inflation data showing a dip to 1.1 percent in December and economists said they added to the case for the European Central Bank to cut official interest rates further.

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