Inflation holds firm as concert tickets offset slowdown in cigarette prices

UK inflation held firm at a three-year low after a slowdown in cigarette price increases was offset by more expensive concert tickets.

Figures from the Office for National Statistics (ONS) show the Consumer Price Index (CPI) was 1.5% last month, flat from the rate in October. Inflation was last lower in November 2016.

Inflation was higher than analysts had predicted, having forecast a decrease to 1.4% for the month.

Nevertheless, inflation remains below the Bank of England’s target rate of 2%.

Mike Hardie, head of inflation at the ONS, said: “The headline rate of inflation remained steady with prices rising across a variety of goods and services such as chocolate, concert tickets and package holidays, offset by falling hotel costs and cigarette prices rising substantially slower than this time last year.”

Tobacco prices significantly weighed down on inflation as the cost of cigarettes rose by just 0.1% compared to a 3.4% rise in November 2018. It came after a rise in tobacco duty was not implemented in October, as has happened in previous years.

Inflation was also pressed down by cheaper hotels, as the price of accommodation dropped by 2% in November.

The ONS said price increases in the recreation and culture sector significantly offset this impact.

It said the upward pressure was particularly driven by higher concert tickets after a number of major UK tours were announced during the month, while package holiday prices also increased.

Meanwhile, the price of food increased by 1% as shoppers saw the cost of chocolate and confectionery jump higher.

There was also a 2.4% rise in the price of fruit, while meat cost 0.9% more over the period.

Elsewhere, clothes prices had a downward pressure as greater discounting resulted in a slowdown in price growth.

The Retail Prices Index (RPI), a separate measure of inflation, was 2.2% last month, rising from 2.1% in October.

The Consumer Price Index including owner-occupiers’ housing costs (CPIH) – the ONS’ preferred measure of inflation – was also 1.5% in October, remaining flat from November.

Read Full Story

FROM OUR PARTNERS