March 7, 2021

UK inflation rises to 0.7% on rising food prices Business News

UK inflation rose last month, driven by higher food prices and lower discounts on household goods, official figures show.

The Consumer Price Index (CPI) rose to 0.7 per cent in January from 0.6 per cent in December, according to the Office for National Statistics.

This figure was higher than analyst forecasts, with many economists forecasting 0.5% inflation for the month.

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Jonathan Atov, ONS ‘Deputy National Statistician for Economic Statistics, said: “Inflation was slightly higher in January and food prices rose.

“Household goods also raised prices this year with lower discounts on items such as bedding and cheddis.

“However, January sales were widespread, with specific price reductions for clothing and footwear.”

Food and beverage prices rose 0.6% between December and January, down 0.2% from a year earlier.

Furniture and household goods are down 1.5% compared to a 3.3% drop a year ago.

Clothing and footwear prices fell 4.9% for the month – the biggest drop in seven years between December and January – and saw an annual decline of 3.8%.

ONS generally does not get 8% of the collection prices, which is a smaller number than in November.

Inflation has been hovering below the Bank of England’s 2% target since mid-2019 COVID-19 Locks pushed it closer to zero as the economy sank last year.

Earlier this month, the central bank expected inflation to rise sharply to its 2% target in the spring.
VAT cuts last year and global oil prices have risen in anticipation of recovery.

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Economists expect prices of some imported goods to rise due to Britain’s post-divorce trade deal with the European Union, which led to disruptions and delays in ports last month.

However, ONS said it found no evidence that it was new ProxyRelated custom fees and transportation costs pushed up consumer prices in January.

The BoE has insisted that there will be no rush to begin removing its biggest stimulus for Britain Corona virusHe said the bad economy and the 2% inflation target would wait for evidence of significant improvement to hit the steady.

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Responding to the latest ONS figures, KPMG UK Chief Economist Yale Selbyn said: “We expect the pace of inflation to accelerate this year as the economic recovery, rising oil prices and temporary VAT cuts for hospitality businesses expire.

“Similarly, the impact of Brexit on supply chains is likely to be felt at consumer prices.

However, overall inflation is unlikely to exceed the bank’s 2% target, which is likely to reach just 1.7% in 2021 and 1.9% in 2022, which will help lower interest rates to recover the economy in the long run.

“It is not uncommon to see negative monthly inflation as retailers cut prices after the holidays in January, but with the renewed lockout, prices have fallen below normal due to the unavailability of certain categories.

“The change in work and consumption patterns triggered by the epidemic led to higher discounts on some items, such as clothing, while other items, such as furniture, saw smaller discounts this year.”

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