Hard-pressed families are feeling some relief.

The rate of inflation fell to a 14-month low of 3 point 6 percent in January, from 4 point 2 percent in December - partly because the previous year's VAT hike fell out of the year-on-year comparison.

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Meanwhile the Chancellor says the threat to Britain's triple-A credit rating is a 'reality check' - but insists it shows that the country must not waiver from his austerity plan. 

The UK's been put on "negative outlook" by the ratings agency Moody's. 

George Osborne's been explaining where he thinks the blame lies: