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Inflation remains negligible

Released: 15 December 2015 Download PDF

Figure A: Contribution of food and motor fuel to the CPI rate of inflation: January 2007 to November 2015


Figure A: Contribution of food and motor fuel to the CPI rate of inflation: January 2007 to November 2015
Source: Office for National Statistics

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The prices households pay for the goods and services they buy remain largely unchanged on a year ago. The Consumer Prices Index (CPI) – which measures these changes – shows that prices increased by 0.1% in the year to November 2015. This means that a basket of shopping that cost £100.00 a year ago would cost £100.10 now. Although the rate of inflation has risen from a 0.1% fall in the year to October, the November rate continues the trend of negligible inflation experienced by the UK during 2015. Calculating an average inflation rate for the year to date gives a figure of 0.0%.

While the headline rate of inflation remains negligible, each household’s personal rate of inflation will depend on the products they buy. For example, prices for food and motor fuels continue to fall on the year, whereas rents and restaurant and hotel bills are rising.

The main upward push on inflation between October and November 2015 (causing it to increase slightly from a 0.1% fall to a 0.1% rise) came from price movements for transport costs, and alcohol and tobacco. Prices fell between October and November in both of these categories but they fell by less than between the same 2 months a year ago. For example, petrol prices fell by 1.5 pence per litre this year compared with a 3.0 pence per litre fall a year ago.

These upward pressures were partially offset by price falls for clothing and footwear, influenced by an increase in the number of items on sale. This is the first time that prices for these goods have fallen between October and November since the official CPI began in 1996 and the fall follows the largest September to October price increase on record. The latest data continues the trend seen since the summer of atypical price movements in this sector.

Source: Office for National Statistics

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