Chief Economist David Kern comments on the inflation figures for January 2016.
- Consumer Price Index rose by 0.3% in the year to January 2016, up from 0.2% rise in the year to December 2015
- The main contributors to the small rise were motor fuels, food, and alcoholic beverages. This was partly offset by falls in air fare prices
- Goods annual inflation in January 2016 was -1.5%, while services annual inflation was +2.3%
Commenting on the inflation figures for January 2016, published by the ONS, David Kern, BCC Chief Economist, said:
“While UK inflation continues to edge up slowly, inflationary pressures are likely to remain muted for the foreseeable future. Labour costs remain subdued, and any upturn in oil prices will take considerable time to be felt, given recent sharp declines.
Our forecast remains that inflation will edge up to around 1% in the second half of this year, and is likely to stay below the 2% target until well into 2017. Risks remain associated with the weakening global economic outlook. The MPC is likely to avoid any thought of raising interest rates for a considerable time yet. In the face of global headwinds, the policy priority remains to support our exporters.”