INFLATION continued to be negligible for the 10th consecutive month with prices remaining almost identical to a year ago.
The Consumer Prices Index (CPI) was 0.1% in November, maintaining the trend which began in Feburary of inflation coming in at either plus or minus 0.1%.
The Office for National Statistics said: “Since early 2015, the CPI 12-month rate has been very close to 0.0%. This means that, taken as a whole, households have experienced very little change in prices compared with the same months in 2014.
“However, the picture for individual households depends on the goods and services that they buy. Looking across the year as a whole, prices for transport costs, food and nonalcoholic beverages and (to a lesser extent) recreational and cultural goods and services have had a downward pull on the rate of inflation.
“These have been counterbalanced by an upward pull from price movements for other goods and services, most notably restaurant and hotel bills, and education costs such as university tuition fees.”
Chris Williamson, chief economist at Markit, said inflation now “looks set to remain weaker for longer than forecasters have recently been expecting”.
He said: “With oil prices falling further to reach lows not seen since the depths of the financial crisis in recent sessions, and the ongoing global supply glut likely to keep prices low for some time to come, it seems that central banks will be revising down their inflation forecasts.
“In its latest Inflation Report, the Bank of England expected inflation to move above 1% in the second half of next year, but this may require wages to rise faster than anticipated in order to offset falling oil prices. This is clearly good news for consumers in two respects: low prices boost spending power and the dovish outlook for inflation takes pressure off the Bank of England from hiking interest rates any time soon.”
