United Kingdom`s inflation fell BOE target for the first time since 2009 to move in line with the recent forward guidance. CPI for the year ended January retreated to 1.9% from 2.0% in December, below analysts' forecast of a linger at 2 percent. The annual drop was buoyed by the slowdown in DVDs, museum entry fess, household goods and alcohol. On the monthly basis, the reading plunged 0.6%, the biggest monthly drop since Janaury 2009, from the prior reading of 0.4% advance. Annual Core CPI, which excludes alcohol, food, tobacco and energy prices, came in at 1.6%, the lowest since June 2009, from the previous of 1.7%. The BOE referred in February's inflation report that "near-term outlook is lower than in November, reflecting unexpectedly weak inflation outturns, smaller rises in utility prices than the MPC had assumed, and the impact of sterling's recent appreciation." "Inflation is expected to remain at, or slightly below, the target over the forecast period, as the waning impetus from past increases in import prices and from administered and regulated prices is offset by a diminishing drag from spare capacity," the report added. Inflation has been lower than forecasted and the rate would remain near gold over the course of the coming three years, thereby easing pressure on policymakers to raise interest rate. The BOE changed its guidance by mentioning that interest rate will not be hiked unless spare capacity in the U.K. economy has been fully absorbed, and policymakers would not focus only on unemployment rate but also on other measures such as business surveys and the number of hours worked. "Inflation is not just at the target level but is likely to stay around that level for some time," BOE policymaker David Miles said, yet he warned that commodity prices pose the biggest risk to U.K. inflation. Crude oil for April's delivery is meanwhile trading around $100.35 a barrel after setting a peak of 100.82 this month. Other inflation gauges showed that Retail Price Index (RPI) edged up to 2.8% on the annual basis from 2.7% while plunged to 0.3% from 0.5% advance on the month. Annual PPI output surged to 0.9% from a previous of 1.0% while the yearly input gauge dropped 1.2% from a prior of -1.0%. Investors will focus on retail sales data later in the week, which may show a slide of 3.1 percent last month after falling a revised 1.0 percent in the last month of 2013. As of 09:40 GMT, the GBP/USD set a new low of 1.6657 while it is currently trading around 1.6680.