Inflation dips as air fares rise less

INFLATION dipped by 0.1% last month to 2.8%, according to official figures.

The Office for National Statistics said the largest contributions to the fall in the rate came from air fares, which did not by the same amount as last year and price movements in recreation and culture.

The clothing and footwear sectors also contributed to the headline Consumer Prices Index (CPI) rate but a rise in petrol and diesel prices partially offset the fall.

The Retail Prices Index (RPI) came down from 3.3% to 3.1%. This measure, which also includes housing costs, is used to set January’s rail fares at a rate of RPI plus 1%.

Business leaders in the West Midlands urged the government and the Bank of England to ensure inflation meets the 2% target figure as soon as possible.

Steve Brittan, president of Birmingham Chamber of Commerce, said: “The figure of 2.8% is still above target but if the trend continues downwards this will be a positive sign for businesses. High inflation is not good for business or the economy so the Bank of England should do everything it can to control the impact.

“This not only comes from pressures at home but events across the globe so we understand that the Monetary Policy Committee faces a delicate balance in getting inflation down to the target 2%.”