United Kingdom Inflation

United Kingdom

United Kingdom: Inflation reaches lowest level in over 12 years

December 16, 2014

In November, consumer prices fell 0.3% over the previous month, which contrasted the 0.1% increase observed in October and marked the first decrease in four months. November’s figure was mainly driven by lower prices for transport as well as for recreation and culture, which offset higher prices for furniture and household goods as well as for clothing and footwear.

Annual inflation fell from 1.3% in October to 1.0% in November, which marked the lowest rate in over 12 years. November’s figure came in below market expectations, which had seen inflation inching down to 1.2%. Annual average inflation inched down from October’s 1.7% to 1.6% in November, and now stands at its lowest level since May 2005.

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 unchanged from last month’s forecast. For 2016, the panel forecasts that inflation will average 2.0%.

Author:, Senior Economist

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United Kingdom Inflation Chart

United Kingdom Inflation November 2014

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

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