UK Inflation Rate Slows to 4-Year Low in November


In November of 2013, UK's annual inflation rate slowed for the second straight month to 2.1 percent, the lowest rate since November of 2009. The largest contributions to the fall came from food and the utilities (gas and electricity), which were partially offset by upward pressures from the transport sector and from some aspects of recreation and culture.

Prices of food and non-alcoholic beverages were little changed compared with a rise of 1.1 percent between a year ago. The main downward contributions came from fruit, where prices rose by less than a year ago, and vegetables, where prices fell this year but rose a year ago. For some fresh produce, there were reports of low yields in 2012 caused by poor weather conditions. There was also a small downward effect from bread and cereals where prices fell slightly this year but rose a year ago.

Cost of housing and household services were little changed compared with a rise of 0.6 percent last. The effect came almost entirely from gas and electricity and relates to the timing of price rises: none of the recently announced rises has entered the index this month whereas last winter’s increases began to affect the index in November of 2012.

The largest upward contributions to the change in the CPI 12-month rate came from transport prices that fell by 0.5 percent compared with a fall of 1.0 percent a year ago. Within the transport sector, the main upward contribution came from motor fuels. Petrol prices fell by 1.7 pence per litre between October and November this year compared with a larger fall of 3.0 pence per litre between the same two months a year ago. There were also smaller upward contributions from air transport and the purchase of vehicles.

Cost of recreation and culture rose by 0.4 percent, mainly due to toys and hobbies (particularly computer games) and data processing equipment.

CPIH, which includes owner occupiers’ housing costs grew 1.9 percent in the year to November of 2013, down from 2.0 percent in October. 

On a monthly basis, prices rose 0.1 percent.

UK Inflation Rate Slows to 4-Year Low in November


ONS | Joana Taborda | joana.taborda@tradingeconomics.com
12/17/2013 9:52:05 AM