United Kingdom Inflation Rate Stable at 2.8% in March


The Consumer Prices Index grew by 2.8 percent in the year to March 2013, unchanged from February. CPI remained broadly flat through the second half of 2012 and into 2013 following a number of years of large increases and decreases. Over the last six months, the CPI 12-month rate has been particularly stable, standing at 2.7 percent for four months followed by 2.8 percent for February and March 2013.

The contributions to change in the CPI from the various detailed categories were relatively small compared with most months. The largest upward contribution came from the recreation and culture sector where there were price rises for audio-visual equipment and books, newspapers and stationery. The largest downward contributions came from furniture and furnishings, motor fuels and meat.

Recreation and culture: prices, overall, rose by 0.5 percent between February and March 2013 compared with a fall of 0.1 percent between the same two months a year ago. Upward contributions came from photographic equipment and books where there were price rises this year compared with price falls a year ago. There was also an upward contribution from recording media where prices rose by more than a year ago.
 
Furniture, household equipment and maintenance: prices, overall, rose by 0.8 percent between February and March compared with a larger rise of 1.3 percent between the same two months in 2012. Within this group, the largest downward effect came from furniture and furnishings where prices of lounge furniture in particular rose by less than a year ago. This was partially offset by a small upward effect from household textiles.
 
Transport: prices, overall, rose by 0.6 percent compared with a rise of 0.8 percent a year ago. The downward effect came predominantly from motor fuels. Petrol prices rose by 2.2 pence per litre between February and March 2013 compared with a rise of 3.3 pence per litre between the same two months a year earlier. This was partially offset by a small upward effect from transport services.
 
Alcoholic beverages and tobacco: prices, overall, fell by 0.5 percent compared with a rise of 0.2 percent a year ago. The downward effects came from spirits and beer where there were price reductions on vodka and lager in March 2013 compared with recoveries in March 2012 following sales periods.
 
CPIH, the new measure of consumer price inflation including owner occupiers’ housing costs, grew by 2.6 percent in the year to March 2013, unchanged from February. The slower growth in CPIH than CPI is due principally to owner occupiers’ housing costs increasing more slowly than overall inflation for other consumer goods and services in the year to March.

ONS | Nuno Fontes | nuno@tradingeconomics.com
4/16/2013 9:45:19 AM