Sticky inflation remains above two per cent target in December

 
Ben Southwood
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CONSUMER price inflation remained stuck above the Bank of England’s target in December, data revealed yesterday.

Headline inflation came in at 2.7 per cent for the third time in the row in December, the Office for National Statistics (ONS) said, marking the 37th straight month of above-target price growth.

The index kept its steady rate of growth due mainly to balancing effects from transport and energy prices. A 5.1 per cent monthly bump in energy prices was due to later yearly hikes from the big six energy providers – potentially adding 0.28 percentage points to the annual rate. But a smaller than expected addition to air fares – 21.9 per cent instead of last year’s 40.9 per cent, balanced most of this, potentially subtracting 0.2 percentage points from the headline annual inflation measure.

However the retail prices index increased 3.1 per cent over the year – an acceleration compared to November. And the tax and prices index – which includes the effects of taxes on consumers – also showed price growth accelerating.