News

UK inflation rates rise in November

The inflation rate in the UK rose above zero last month, with prices rising by 0.1%; a positive move for the first time since July.

Sharply falling commodity prices means inflation has been suppressed during much of 2015, despite the increase in November. According to the Consumer Price Index (CPI), the price levels across the economy were at the same level as this time last year [1].

The Office for National Statistics (ONS) has said that smaller declines in transport costs such as the cost of petrol, alcohol and tobacco prices have contributed to the increase in the inflation rate [1].

Analysts had expected a figure of about zero, considering the rate of inflation a month earlier (October) was -0.1% [2].

This comes after last weeks’ announcement by the Bank of England to keep interest rates at 0.5%. This was due to the Bank predicting that inflation would stay below 1% until the second half of next year.

Inflation as measured by the Retail Price Index (RPI) was 1.1%, up from 0.7% in October, although this includes mortgage payments and council tax, whereas CPI does not [2].

According to the ONS, clothing prices were the biggest drag on inflation after they recorded an unprecedented fall between October and November, usually a period of higher figures due to the onset of Christmas. The ONS has concluded that records were before the ‘Black Friday’ discounts took effect, thus did not show a true overall indication of spending for that period [3].

 

[1] The Guardian. ‘UK inflation moves above zero’. theguardian.com

[2] BBC News. ‘UK inflation rate rises to 0.1% in November’. bbc.co.uk

[3] Reuters UK. ‘UK inflation edges back above zero in November’. uk.reuters.com