United Kingdom Inflation December 2020

United Kingdom

United Kingdom: Inflation increases in December

January 20, 2021

Consumer prices rose a seasonally-adjusted 0.26% in December over the previous month, swinging from the 0.15% drop recorded in November. Looking at the details of the release, housing and utilities prices rose in December after dropping in the previous month, and prices pressures for transportation also increased.

Inflation came in at 0.6% in December, up from November’s 0.3%. Annual average inflation remained at November's 0.9% in December. Lastly, core inflation rose to 1.4% from November’s 1.1%.

This year inflation is seen rising closer to the Bank of England’s 2.0% target due to a combination of higher energy prices, economic recovery, the expiration of last year’s temporary VAT cut and supply-chain pressure linked to Brexit.

FocusEconomics Consensus Forecast panelists expect inflation to average 1.5% in 2021, unchanged from last month’s forecast, and 1.9% in 2022.


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United Kingdom Inflation December 20 20

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


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