UK Inflation Rate Drops to 0% in February


British consumer prices were unchanged in the year to February 2015, the level not seen since comparable records started in 1989. The main contributions to the slowdown came from food, fuel, furniture & furnishings and a range of recreational goods.

Food prices fell by 3.4% and prices of motor fuels fell by 16.6%. The food and motor fuels groups in total reduced the CPI 12-month rate by approximately 0.9 percentage points.

The largest downward contributions to the change in the CPI 12-month rate between January and February 2015 came from:
• Recreation & culture: prices, overall, were little changed between January and February this year compared with a rise of 0.8% between the same two months a year ago. The downward contribution came from price movements for a range of recreational goods and services, most notably data processing equipment, books and games, toys & hobbies.
• Food & non-alcoholic beverages: prices, overall, fell by 0.2% between January and February 2015, compared with a rise of 0.5% between the same two months a year earlier. The fall in prices this year is the first between January and February since 1998. The downward effects came from a variety of product groups, particularly milk, cheese & eggs, mineral waters, soft drinks & juices, bread & cereals and sugar, jam, syrups, chocolate & confectionery.
• Furniture, household equipment & maintenance: prices, overall, rose by 1.4% between January and February, compared with a larger rise of 2.4% between the same two months a year ago. The downward contribution came principally from furniture & furnishings where prices rose by less than a year ago following the January sales period.

The CPI rose by 0.3% between January and February 2015 compared with a larger rise of 0.5% between the same two months a year earlier. 

The core inflation rate which strips out increases in energy, food, alcohol and tobacco, fell to 1.2 percent in February compared with 1.4 percent in January.

UK Inflation Rate Drops to 0% in February


ONS | anna@tradingeconomics.com
3/24/2015 9:57:59 AM