British inflation hits one-year high in Jan

London / AFP

Britain’s annual inflation rate rose in January to its highest level for a year, buoyed by the higher prices for clothing and alcohol, official data showed
Tuesday.
The 12-month Consumer Price Index (CPI) rose by 0.3 percent last month, after registering 0.2 percent in December, the Office for National Statistics (ONS) said in a statement.
Alcohol and tobacco increased by 1.3 percent compared with January 2015, when there had been heavy discounts on beer.
Inflation also rose as fuel and food prices fell by less than they experienced one year ago.
Despite the rise in the CPI, British inflation still remains historically low, with the Bank of England predicting it will remain below the government’s official 2.0-percent target for some time yet. “While still at historically low levels, CPI has today edged up to its highest rate for a year,” said James Tucker, who is head of CPI at the ONS. “The main reason for the slight rise in inflation was fuel prices falling by less in January than they did at the same point in the previous year.
“Clothing, food and alcoholic drinks also helped to push up inflation, offset by falling air fares.”
Collapsing oil prices are set to keep a lid on inflation, leaving the Bank of England in no hurry to raise interest rates from a record-low 0.50 percent, where they have stood since March 2009.
“CPI inflation is heading gradually back towards its target as the drags from cheaper oil, food and import prices ease,” noted economist Samuel Tombs at Pantheon Macroeconomics.