United Kingdom: Inflation dips in December but remains elevated
January 16, 2018
Consumer prices rose 0.4% in December over the previous month, up from November’s 0.3% rise and matching analysts’ expectations. December’s figure was largely driven by higher prices for transportation and furniture, household equipment and maintenance.
Inflation in December ebbed to 3.0%, down from 3.1% in the prior month and in line with market expectations. The largest downward contribution to the figure came from air fares, which didn’t rise by as much as they did in the same period last year. Annual average inflation increased from 2.6% in November to 2.7% in December.
UK Inflation Forecast
The Bank of England sees inflation reaching 2.4% in Q4 2018 and 2.2% in Q4 2019. FocusEconomics Consensus Forecast panelists expected inflation to average 2.5% in 2018 and 2.2% in 2019, as the impact of the depreciation of the currency gradually fades away.
Author: Oliver Reynolds, Economist