United Kingdom Inflation

United Kingdom

Inflation eases to a new record low in January

In January, consumer prices fell 0.9% over the previous month, which was down from the flat reading reported in December. January’s figure was mainly driven by falling prices for motor fuels and food.

Annual inflation fell from 0.5% in December to 0.3% in January, which marked the lowest rate on record. January’s figure came in slightly below market expectations of inflation inching down to 0.4%. Annual average inflation inched down from December’s 1.5% to 1.3% in January, and now stands at its lowest level since November 2004.

In its latest inflation report from November, the Bank of England projected that inflation would average 1.2% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 1.6% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, the panel forecasts that inflation will average 1.8%.

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United Kingdom Inflation Chart

United Kingdom Inflation January 2015

Note: Annual and monthly variation of consumer price index in %.
Source: Office for National Statistics (ONS) and FocusEconomics calculations.

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