UK Inflation Inches Up During January

Britain’s annual rate of inflation increased slightly during January, but still remained well below the Bank of England’s 2.0% target, according the latest figures from the Office of National Statistics.

The Chancellor of the Exchequer’s new measure of inflation, the Consumer Price Index, rose by 0.1% point to 1.4% last month on the back of bank overdraft charges and lower seasonal reductions on clothing.

Meanwhile, the UK’s previously targeted underlying Retail Prices Index rate of inflation, which includes mortgage repayments, dropped to 2.4% during January, down from 2.65 in the previous month.

Consumer inflation has now been below the Bank of England’s new target since May 1998. However, the Bank expects the level to rise sharply this year, justifying its decision to raise interest rates earlier this month to 4%

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