UK Consumer Prices Rise for The First Time in 4 Months


Consumer prices in Britain increased 0.1 percent year-on-year in May of 2015, following a 0.1 percent drop in April, as cost of housing and utilities increased while transport and food cost fell at a slower pace.

Year-on-year, cost of housing and utilities increased 0.4 percent in May (0.5 percent in April); restaurants and hotels went up 1.9 percent (2 percent in April) and prices of clothing and footwear rose 0.2 percent, rebounding from a 0.4 percent drop in April. Transport prices recorded the lowest drop so far this year, falling by 1.5 percent (-2.8 percent in April), mainly due to air fares with the timing of Easter in April a likely factor in the movement. In addition, cost of food and non-alcoholic beverages decreased 1.8 percent (-2.8 percent in April). The largest downward pressure came from prices of recreation and culture that fell at a faster 1 percent in May (0.4 percent in April).

On a monthly basis, consumer prices increased 0.2 percent for the third consecutive period. The largest upward contribution came from transport prices which rose 0.6 percent, mainly driven by air transport. There was also a significant upward effect from motor fuels with average petrol prices rising by 2.5 pence per litre between April and May. The largest downward contribution came from prices of recreation and culture that fell 0.1 percent, mainly due to games, toys and hobbies (notably computer games) and data processing equipment (principally computer peripherals such as printers and routers). 

The core inflation rate which strips out increases in energy, food, alcohol and tobacco, accelerated to 0.9 percent in May from 0.8 percent in April.

ONS | Joana Taborda | joana.taborda@tradingeconomics.com
6/16/2015 10:10:55 AM