United Kingdom: Inflation reaches lowest rate in over four years
January 15, 2014
In December, consumer prices rose 0.4% over the previous month. The figure came in above the 0.1% increase observed in November, but undershot market expectations of a 0.5% rise. The reading reflects an increase in prices for housing, water and fuels as well as for furnishings, household equipment and routine house maintenance.
In spite of the higher monthly figure, annual inflation edged down from 2.1% in November to 2.0% in December, which marked the lowest rate in more than four years. Meanwhile, annual average inflation was unchanged over the previous month at 2.6% in December.
In its latest inflation report from November, the Bank of England projects inflation to average 2.5% this year, before moderating to 2.2% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 2.6% in 2014, which is unchanged from last month's forecast. For 2015, the panel forecasts inflation to average 2.3%.
Author: Dirina Mançellari, Senior Economist