Banks Reduce Prime; Prices Hold Steady: Banks Reduce Prime Rate to 10 ...
Several major banks cut their prime lending rate by half a point to 10 Yu percent yesterday, responding to continuing progress against inflation. The Labor Department reported yesterday that tumbling oil costs helped to hold consumer price inflation to a modest 0.2 percent in January.</br></br>The decline in the prime rate brought it to its lowest point in more than four years. The rate had been at 11 percent since early January, and banks had come under growing pressure from Congress and the Reagan administration to reduce lending rates.</br></br>The small increase in the consumer price index left that inflation measure still.almost as low as it was last September and only 3.8 percent higher than it was in January 1982. The index was unchanged in November and fell 0.3 percent in December.</br></br>Inflation in the Washington metropolitan area rose only 4 percent during the 12 months ending in January, the lowest rate for more than a decade. [Details on Page D9.]</br></br>Nationally, the January increase stayed low even though the Bureau of Labor Statistics, as announced earlier, changed the home ownership component of the CPI by substituting a rental equivalence measure for home purchase and financing costs. On the old basis, the January rise was only 0.1 percent and the 12-month increase only 3.6 percent.