Inflation rate unchanged at 2.1 per cent

Consumer prices index (CPI) annual inflation was 2.1 per cent in December, the same as November’s figure, according the Office for National Statistics (ONS).

Large downward contributions to the CPI annual rate came from:

Housing and household services due to gas and electricity bills which increased by less than last year when tariff increases were being phased in;

Furniture and furnishings where the price of kitchen units fell, reflecting discounting on some lines, and prices increased by less than last December across a range of other furniture.

The largest upward contribution to the CPI annual rate was from food and non-alcoholic beverages, particularly cauliflowers, tomatoes, onions and cabbages. Bread and cereals and sugar, jam, confectionery and chocolate also contributed.

A further upward contribution came from clothing and footwear, mainly due to greater discounting of clothing the previous December, across a range of men’s and women’s clothing. The largest effect came from women's dresses.

There was a small upward contribution from miscellaneous goods and services, mainly due to an increase in mortgage arrangement fees, within financial services.

Retail prices index (RPI) inflation fell to 4.0 per cent in December, down from 4.3 per cent in November, mainly due to average mortgage interest payments where there was a smaller increase than last December. Fares and other travel increased, due to air fares, which rose more than they did the previous year. Otherwise the main factors influencing the RPI were similar to those affecting the CPI.

RPIX inflation – the all items RPI excluding mortgage interest payments – was 3.1 per cent in December, down from 3.2 per cent in November.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate in November, at 2.1 per cent, was below the provisional figure for the European Union as a whole of 3.1 per cent.