Inflation nudges up 0.3 per cent
HIGHER alcohol and tobacco prices helped push inflation to its highest rate for a year last month, official figures revealed yesterday.
The Consumer Prices Index rose to 0.3 per cent in January, from 0.2 per cent in December, said the Office for National Statistics.
The changes mean that a range of goods and services that cost £ 100 a year ago cost 30p more.
Alcohol and tobacco were 1.3 per cent more expensive than in January 2015.
Retail Prices Index inflation, including housing costs, rose to 1.3 per cent from 1.2 per cent in December
Despite last month’s increase, the third in three months, CPI inflation remains at historically low levels and way below the Government’s two per cent target. A Treasury spokesman said: “Today’s low inflation figures continue to show prices growing more slowly than wages, boosting families’ spending power with just over a month to go before the introduction of the new National Living Wage.”
Experts have predicted inflation will stay low and that the Bank of England will therefore be in no hurry to raise interest rates any time soon from their record low 0.5 per cent.
Lower- than- expected inflation coupled with low borrowing costs will net Chancellor George Osborne a windfall of more than £ 20billion when he delivers his March 16 Budget, the Capital Economics consultancy firm has calculated.