Wednesday, December 16, 2009

UK's CPI up in November

According to the UK's Office of National Statistics, the CPI annual inflation was 1.9% in November, up from 1.5% n October.

By far the largest upward pressure affecting the change in the CPI annual rate came from transport. Within the transport category the largest upward effect came from fuels and lubricants, where prices rose by 2.8 per cent between October and November this year but fell by a record 8.3 per cent a year ago. The large fall in 2008 was due to sharp falls in petrol and diesel prices, reflecting the falling price of crude oil in the latter half of 2008.

There were small upward pressures from:

* Clothing and footwear - with the main effects coming from men’s and women’s outerwear

* Housing and household services - where the price of heating oil rose this year but fell a year ago, again reflecting movements in crude oil prices

The largest downward pressure affecting the change in the CPI annual rate came from food and non-alcoholic beverages. Overall prices in this category rose by 0.6 per cent between October and November this year compared with 1.4 per cent a year ago.

The main downward pressure came from vegetables and, to a lesser extent, coffee, tea and cocoa. Prices for a wide range of these products fell this year but rose a year ago. Partially offsetting these was a large upward effect from fruit, with this year’s prices rising by 11.7 per cent between October and November, compared with a 6.0 per cent rise a year ago.

Smaller downward pressures came from:

* Miscellaneous goods and services - due to appliances and products for personal care and financial services, where mortgage arrangement fees rose by less than a year ago

* Communication - where mobile phone charges fell this year but rose a year ago

* Health - with prices of pharmaceutical products falling this year but rising a year ago

In the year to November, RPI annual inflation was 0.3%, compared with a fall of 0.8 per cent in October. The last time there was an increase in the annual inflation rate greater than 1.1 per cent was between March and April 1990, when the rate increased from 8.1 per cent to 9.4 per cent.

In November 2009, the main factors affecting the CPI also affected the RPI.

Additionally, there was upward pressure from housing, mainly from mortgage interest payments which rose this year but fell a year ago. Overall, lenders passed on October’s half point decrease in the Bank rate.

RPIX inflation – the all items RPI excluding mortgage interest payments – was 2.7 per cent in November, up from 1.9 per cent in October.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate in October, was above the provisional figure for the European Union. The UK rate was 1.5 per cent whereas the EU’s as a whole was 0.5 per cent.

The next publication date for CPI stats is 19 January 2010.

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