United Kingdom Inflation Rate Up to 2.8 Percent in February


The headline rate of inflation rose to 2.8 percent following four consecutive months when it stood at 2.7 percent. The Consumer Prices Index showed that prices grew by 2.8 percent in the year to February 2013. Although up on the 2.7 percent recorded in each of October 2012 to January 2013, this continues the trend of, broadly, consistent inflation that has been seen since spring 2012.

Below the headline, there were a number of effects pushing the inflation rate up between January and February; the largest came from electricity and gas where average bills rose as expected. There were also upward pushes from recreational goods (such as games and photographic equipment), motor fuels and air transport.

Petrol prices rose by 4.0 pence per litre between January and February 2013 compared with a more modest 1.9 pence per litre rise in 2012. Similarly diesel prices rose by 3.7 per litre in 2013 compared with 1.4 pence per litre in 2012. Air fares also rose between January and February this year but fell between the same two months a year ago.

Partly offsetting these upward effects, overall food & non-alcoholic drink prices pushed down on the headline rate between January and February. The effect came principally from chocolate and confectionery and soft drinks. Off-sales of alcohol also had a downward effect with sales of certain spirits and wines in February this year compared with price rises following sales periods in 2012. Miscellaneous goods and services and clothing prices also provided downward pushes.
 
A new measure of consumer price inflation (initially known as CPIH) including owner occupiers’ housing costs has been launched in March 2013. The CPIH 12-month rate stands at 2.6 percent in the year to February 2013, up from 2.5 percent in January.

ONS | Nuno Fontes | nuno@tradingeconomics.com
3/19/2013 9:34:01 AM