UK inflation rate rises to 0.2%

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The UK’s inflation rate rose to an 11-month high in December, with a sudden rise in air fares offsetting falling food and clothing prices.

The take to task as measured by the Consumer Prices Index rose to 0.2%, from November’s 0.1%, the Obligation for National Statistics (ONS) said.

It is the first time in a year that the toll has exceeded 0.1%, and the rise is higher than economists had expected.

Air fares vaulted 46% in December, the biggest rise for 13 years.

December typically consult withs a high monthly increase in air fares, due to the Christmas holidays, but the ONS said this fence was the highest since 2002.

But it warned that air prices were “highly fickle” and said a November-to-December increase of more than 40% was not unusual.

Petrol prizes, while lower than November, fell less than in the very period last year, so they also contributed to the rise in inflation, the ONS chance.

This jump in transport costs was rtially offset by a drop in the bottle, tobacco and food costs.

The Retail Prices Index, a se rate amount that includes housing costs, grew by 1.2%, up from 1.1% in November.

Monthly inflation has been between -0.1% and 0.1% for the biography 11 months, with low oil prices and a fiercely competitive environment for supermarkets hold back prices down for consumers.

For 2015 as a whole, consumer price inflation averaged 0%, its lowest direct since com rable records began in 1950.

Latest minutes from the Bank of England’s Fiscal Policy Committee (MPC), which voted 8-1 to keep rates at their advised historic 0.5% low, showed that members expect inflation to cadaver far below its 2% target for some time yet.

December’s inflation signs will further dampen expectations of a rise in interest rates any outmoded soon.

Most economists now believe that it could be the third dwelling-place of this year, or even 2017, before there is any movement in absorb rates.

“There aren’t yet any signs which will worry the MPC. Inflation looks set to motivate further over the coming months as sharp falls in petrol and provisions prices at the beginning of 2015 drop out of the calculation,” said Scott Bowman, UK economist at Major Economics.

“The MPC will be in no rush to push through the first rate hike.”

Ben Brettell, superior economist at Hargreaves Lansdown, agreed, saying: “This be prolongs the trend of inflation being at or very close to zero and places midget pressure on the Bank of England to lift interest rates. Those expecting for higher rates on this side of the Atlantic shouldn’t hold their amaze.”

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