UK Inflation Rate Rises to 11 Month High

The UK’s inflation rate rose to an 11-month high in December, with a sharp rise in air fares offsetting falling food and clothing prices.

The rate as measured by the Consumer Prices Index rose to 0.2%, from November’s 0.1%, the Office for National Statistics (ONS) said.

It is the first time in a year that the rate has exceeded 0.1%, and the rise is higher than economists had expected.

Air fares jumped 46% in December, the biggest rise for 13 years.
December typically sees a high monthly increase in air fares, due to the Christmas holidays, but the ONS said this jump was the highest since 2002.

But it warned that air prices were “highly variable” and said a November-to-December increase of more than 40% was not unusual.

Petrol prices, while lower than November, fell less than in the same period last year, so they also contributed to the rise in inflation, the ONS said.
This jump in transport costs was partially offset by a drop in alcohol, tobacco and food costs.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza