UK’s Jan inflation rate unchanged at 2.7%
Rise in alcohol, tobacco and air fares countered elsewhere
By Gaurav Sharma | CFO UK | Published 10:12, 12 February 13
The UK’s rate of consumer price inflation (CPI) for January remained unchanged at 2.7 percent for the fourth month in a row, according to data released by the Office for National Statistics (ONS) on Tuesday.
The main upward pressure on the headline rate of inflation came via an 8.5 percent rise in the prices of alcohol, tobacco and air fares. However, this was countered by a slower pace of price rises seen elsewhere, especially in clothing and footwear goods.
The ONS said it was the longest period over which the headline rate of inflation had remained unchanged. The CPI rose to this level in October 2012 from a 34-month low of 2.2 percent in September.
The statistics body also revealed that January’s Retail Prices Index (RPI) inflation rate, which includes mortgage interest payments and is usually higher than the CPI, rose to 3.3 percent in January from 3.1 percent in December.
Commenting on the figures, Howard Archer, chief UK economist at IHS Global Insight, opined that the headline rate of inflation may have remained flat but offered little comfort to the Bank of England, which craves a 2 percent rate, and British households squeezed in a tough economic climate.
“Furthermore, it looks highly likely that consumer price inflation will reach 3.0 percent within the next few months and stay close to that level until the fourth quarter,” Archer told CFOWorld.
“Oil prices are at a nine-month high, while food prices look likely to stay relatively elevated in the near term at least due to recent poor harvests. On top of this is the increasing risk that import prices will be pushed up by the pound sterling’s recent weakness,” he concluded.
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