UK Inflation Rate Steady at 0.3%

Consumer prices in the United Kingdom went up 0.3 percent year-on-year in February of 2016, the same as in January and below market expectations of 0.4 percent. On a monthly basis, consumer prices rose 0.2 percent, rebounding from a 0.8 percent decline in the previous month.

Year-on-year, the biggest upward pressure came from cost of housing and utilities (up 0.3 percent from 0.4 percent in the previous month), followed by restaurants and hotels (up 1.9 percent from 1.6 percent), miscellaneous goods and services (up 1.2 percent from 1.4 percent) and clothing and footwear (up 0.3 percent from 0.4 percent). In contrast, transport prices fell at a faster 1.1 percent (-0.7 percent in January), recreation and culture went down 0.1 percent (-0.1 percent in January) and food and non-alcoholic beverages declined 2.3 percent (-2.6 percent in January). 

On a monthly basis, the main upward contribution to change in the CPI came from food and non-alcoholic beverages (prices up 0.1 percent), most notably vegetables and milk, cheese and eggs. There were smaller upward contributions from restaurants and hotels (prices up 0.5 percent), particularly hotel accommodation and furniture, household equipment and maintenance (prices up 1.7 percent). The main downward contribution came from transport where prices were unchanged. The largest downward effects came from road passenger transport and bicycles and second-hand cars. There was a smaller downward contribution from miscellaneous goods and services (prices unchanged), particularly from personal care products such as toothpaste and moisturising cream.

Annual core inflation rate which strips out increases in energy, food, alcohol and tobacco came in at 1.2 percent, the same as in slowed back to 1.2 percent after rising to 1.4 percent in December.

UK Inflation Rate Steady at 0.3%

ONS | Joana Taborda |
3/22/2016 10:03:24 AM