UK Inflation Rate Highest Since 2014


Consumer prices in the United Kingdom rose 1.6 percent year-on-year in December of 2016, higher than 1.2 percent in November and above market expectations of 1.4 percent. It is the highest inflation rate since July of 2014, boosted by rising cost of transport and housing and utilities amid a weaker pound.

Main upward pressure came from prices of transport (3.7 percent compared to 2.5 percent in November), housing and utilities (0.4 percent from 0.2 percent), recreation and culture (0.9 percent from 0.7 percent) and restaurants and hotels (2.8 percent from 2.6 percent). Prices of food and non-alocoholic beverages fell 1.1 percent, the least since August of 2014. 

On a monthly basis, consumer prices increased 0.5 percent, following a 0.2 percent gain in November and beating expectations of a 0.3 percent increase. It is the highest monthly inflation since February of 2014, boosted by transport prices (+2.9 percent), namely air fares (+49 percent). Food cost increased 0.8 percent and fuel prices fell less (-0.4 percent). 

The core index which excludes prices of energy, food, alcohol and tobacco advanced 1.6 percent on the year, above 1.4 percent in November and expectations of 1.4 percent. It is the highest reading since August of 2014.


ONS | Joana Taborda | joana.taborda@tradingeconomics.com
1/17/2017 10:04:48 AM