The UK’s inflation rate jumped in December despite Covid curbs that forced non-essential shops to shut.
The Consumer Prices Index rose to 0.6%, from 0.3% in November, pushed higher by rising transport and clothes prices, the Office for National Statistics (ONS) said. Many people rushed to travel and beat Christmas restrictions. December’s rise was slightly higher than many economists’ forecasts of 0.5%.
ONS deputy national statistician for economic statistics Jonathan Athow said: “Clothing prices put upward pressure on inflation in December, despite some evidence of continued discounting.
“Transport costs, including air, sea and coach fares, as well as petrol prices, rose as some travel restrictions eased during parts of the month.
“These were partially offset by falling food prices, most notably for vegetables and meat.”
The ONS said clothing prices rose “fractionally” in December, a month in which they usually tend to fall because of sales.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the rise in transport costs was partly due to the timing of the ONS survey.
“The ONS collected its data five days closer to Christmas Day last month than in December 2019; airline fares tend to rise sharply as the Christmas holidays approach,” he said.
“Looking ahead, we expect CPI inflation to hover between 0.5% and 0.8% in [the first quarter], before leaping to 1.5% in April, when Ofgem likely will increase its default tariff cap for electricity and natural gas prices, and the anniversary of last year’s slump in oil prices will be met.”
What is inflation?
Inflation is the rate at which the prices for goods and services increase. It affects everything from mortgages to the cost of our shopping and the price of train tickets. It’s one of the key measures of financial well-being, because it affects what consumers can buy for their money. If there is inflation, money doesn’t go as far.
Source: bbc.com
