UK inflation rate edges up to 0.3 per cent in January

LONDON – Britain’s annual rate of consumer price inflation rose to 0.3 per cent in January from 0.2 per cent in December — the highest level in a year.

The Office of National Statistics said Tuesday the main contributors were motor fuels. Though oil prices have remained low, they fell more sharply in January 2015 than in January 2016. A drop in air fares also offset the rise.

Nonetheless, the rate of inflation remains well short of the Bank of England’s 2 per cent target. That is keeping pressure off policymakers, who are in little hurry to raise interest rates from a record low 0.5 per cent.

Scott Bowman of Capital Economics, says inflation will be “going nowhere fast,” as recent falls in oil prices will limit the rate at which fuel price deflation eases.