Dearer booze pushes inflation rate to highest for a year

UK Inflation Perks Up - Just

Inflation edged up to its highest rate for a year last month as rises in the price of alcohol and clothing pushed up the cost of living.

The Consumer Prices Index (CPI) measure of inflation rose to 0.3% in January from 0.2% in December, according to the Office for National Statistics (ONS).

Alcohol and tobacco rose by 1.3% compared with January 2015, when there were heavy discounts on beer.

The ONS said inflation also rose as fuel and food prices dropped less than they did a year ago.

But despite the rise in CPI, inflation still remains historically low, with the Bank of England predicting inflation to remain far below the Government's 2% target for some time yet.

Sharply lower oil prices are set to keep a lid on inflation, leaving the UK central bank in no hurry to raise rates above 0.5%, where they have remained for nearly seven years.

James Tucker, ONS head of CPI, said: "While still at historically low levels, CPI has today edged up to its highest rate for a year.

"The main reason for the slight rise in inflation was fuel prices falling by less in January than they did at the same point in the previous year.

"Clothing, food and alcoholic drinks also helped to push up inflation, offset by falling air fares."