Air fares help inflation rise
New figures from the Office for National Statistics (ONS) show that annual inflation as measured by the Consumer Prices Index (CPI) the Government’s target measure was 2.8 per cent in February, up from 2.7 per cent in January.
The largest upward effect on the CPI annual rate came from transport costs due to increases in air fares in February, particularly for travelling to European destinations. Small upward ontributions came from sea fares and from purchase of motor vehicles, with prices for both increasing by more than a year ago. These were partially offset by a large downward effect from fuels and lubricants, where the average price recorded for petrol fell in February, compared with an increase last year.
Further large upward contributions came from:
Miscellaneous goods and services, where prices for personal care appliances increased in February by more than a year ago;
Food and non-alcoholic beverages, where price increases particularly for fresh food were partially offset by price cuts for shop bought milk; and Furniture, household equipment and routine maintenance, where prices for furniture continued to recovered from January sales and generally rose by more than a year ago.
The largest downward effect on the CPI annual rate came from recreation and culture, due to price changes for games, toys and hobbies. Prices for computer games fell in February compared to large increases a year ago,with smaller effects from price cuts in children’s toys.
Retail Prices Index (RPI) inflation rose to 4.6 per cent in February, from 4.2 per cent in January. As in January, the largest upward contribution came from housing, mainly for those housing costs excluded from the CPI.
There was a large upward effect from mortgage interest payments, with lenders passing on the remainder of January’s quarter point increase in the Bank rate. There was also a small upward contribution from depreciation, which rose this year by more than a year ago, reflecting movements in the smoothed house price index used to calculate this component.
RPIX inflation the all items RPI excluding mortgage interest payments
was 3.7 per cent in February, up from 3.5 per cent in January. As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate is above average for the European Union as a whole.
The provisional inflation rate for the EU 27 in February was 2.1 per cent,compared with the UK rate of 2.8 per cent for the corresponding period.
