Inflation rate falls closer to Bank of England target

Figures from the Office for National Statistics (ONS) show the Consumer Prices Index (CPI) fell to 2.1% in December from 2.3% in November.

December inflation met economists’ expectations of 2.1% and came close to the central bank’s 2% target.

The decline in inflation was attributed to falls in petrol prices and from air fares, where the ONS said air ticket prices rose between November and December, but by less than a year ago.

Mike Hardie, head of inflation at the ONS, said: “Inflation eased mainly due to a big fall in petrol, with oil prices tumbling in recent months.

“Air fares also helped push down the rate with seasonal prices rising less than they did last year. These were partially offset by small rises in hotel prices and mobile phone charges.”

He added: “House price growth was little changed in the year to November, with buoyant growth across much of the UK held back by London and the South East”.

Low petrol prices and air fares were slightly offset by rises in various categories, including accommodation services, mobile phone charges, games, toys and hobbies and food.

The ONS said most goods and services lifted inflation, apart from clothing and footwear, which had a small downward pull on the rate, with prices falling by 0.9% in the year to December.

At the pumps, motorists faced lower fuel costs with petrol down by 6.4p per litre on the month to 121.7p, which was the lowest price since April 2018.

Diesel also fell by 4.6p to 131.9p per litre, the lowest since July 2018.

The decline in motor fuel pulled transport services inflation lower in December to 1.5% from 3.9% the month before.

The Retail Prices Index (RPI), a separate measure of inflation, was 2.7% last month, down from 3.2% in November.

The Consumer Prices Index including owner-occupier housing costs (CPIH) - the ONS’s preferred measure of inflation, was 2%, down from 2.2% in November.