UK Inflation Rate Slows to 2% in December and Hits BoE Target

In December of 2013, UK inflation rate decelerated to 2 percent from 2.1 percent in the previous month and reached Bank of England's target level. This is the first time that the CPI has been at or below the target since November of 2009, when the index stood at 1.9 percent. On a monthly basis, prices slowed to 0.4 percent from 0.5 percent in November.

The largest contributions to the fall in the rate came from prices for food and non-alcoholic beverages, especially fruit and meat, and recreational goods and services like computer games. These were partially offset by an upward contribution from motor fuels. 

The largest upward contribution came from transport prices, mainly cost of petrol and diesel. Petrol prices rose by 0.5 pence per litre between November and December. Diesel prices rose by 0.8 pence per litre. The upward contribution was partially offset by prices of air fares. 

The overall price increase for gas and electricity in December of 2013 was slightly larger than the rises a year earlier, resulting in a small upward contribution to inflation.

CPI harmonized grew by 1.9 percent in the year to December 2013, unchanged from November. RPIJ grew by 2.0 percent, also unchanged from November. 

UK Inflation Rate Slows to 2% in December and Hits BoE Target

ONS | Joana Taborda |
1/14/2014 9:58:10 AM