19 Nov 2014
Measured by the Consumer Price Index (CPI), UK inflation rose to 1.3% in October, up on its five-year low of 1.2% the previous month, but still below the Bank of England’s target of a 2% inflation rate.
The Office for National Statistics has put the marginal increase down to factors such as transport costs remaining higher than they did in 2013, and a recent spike in the sale of computer games and toys.
Many items such as food and non-alcoholic beverages actually showed a drop in price of 1.4%. Furniture and household equipment also fell by 1.1%. In addition, the ONS said that fuel prices fell by 2.5 pence per litre between September and October.
The Bank of England has previously warned that the inflation rate could sink as low as 1% in the coming six months. However, the latest small rise is unlikely to change its decision to keep its key interest rate at 0.5%.
Meanwhile, a recent study by market researchers at Kantar Worldpanel shows an overall decline in food sales for the first time in 20 years.
Head of retail and consumer insight at Kantar Worldpanel, Fraser McKevitt, said: ‘The declining grocery market will be of concern to retailers as they gear up for the key Christmas trading tradition.
‘I think it’s likely this pattern will continue until Christmas and into the first half of 2015’.