UK Inflation Rate At 14-Year Low

British annual inflation rate slowed to 0.5 percent in December of 2014 from 1 percent in the previous month, due to a drop in food and fuel prices. It is the lowest rate since May of 2000.

Year-on-year, prices of food and non-alcoholic beverages recorded the highest decrease (-1.7 percent), followed by transport (-1.4 percent), mainly due to a 10.5 percent drop in cost of fuel and lubricants. Additional downward pressures came from miscellaneous goods and services (-0.6 percent) and clothing and footwear (-0.3 percent). 

In contrast, education cost rose 10 percent; housing, water, electricity and gas went up 1 percent and communication prices advanced 0.7 percent. 

On a monthly basis, consumer prices were flat in December, following a 0.3 percent drop in the previous month. The largest downward contributions came from housing and household services (0.0 percent) and transport (-0.2 percent).  Almost all of the downward contribution came from the falling price of petrol and diesel. The average price per litre has fallen to 116.8p for petrol and 122.9p for diesel. This is 24.8p per litre below the peak average prices of 141.6p and 147.7p per litre for petrol and diesel respectively in April 2012. 

UK Inflation Rate At 14-Year Low

ONS | Joana Taborda |
1/13/2015 10:25:04 AM