The falling cost of gas and food kept consumer prices in check in November but some inflationary pressure appears to be building in the economy.
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Stripping out erratic energy and food prices, core inflation rose to 1.2%, and last month’s insurance premium tax rise from Chancellor George Osborne also pushed up motor premiums. The latest figure was 1.3 percent core inflation for the year ended October 31.
Consumer Price Index (CPI), which measures inflation in Nigeria, dropped for the first time in 11 months in October, only to rise again due to fuel scarcity, driving food prices to record high.
However, increases in the Core sub-index also rose at the same rate for the second consecutive month at 8.7 per cent, as rates slowed for the quarter.
Despite the escape from negative inflation, the UK Consumer Price Index (CPI) is still a far cry from the 2% target set by the Bank of England (BoE).
The rising retail inflation will add to worries of RBI Governor Raghuram Rajan who had left interest rate unchanged earlier this month, targeting to contain retail inflation at 5 per cent by March 2017.
The energy index fell 1.3 percent after increasing by 0.3 percent in October. The cost of doctor visits increased 1.1 percent, while prescription drug prices advanced 0.4 percent.
Over the past nine months CPI has been between 0.1% and -0.1%, which means that households across Britain have experienced very little change in prices compared with the same months in 2014.
And Danske Bank’s Belfast-based economist Angela McGowan is predicting that that UK’s interest rate may rise from its historic 0.5 per cent low as soon as next May.
The November Consumer Price Index, the last significant piece of data before the Federal Open Market Committee meeting begins Tuesday, showed no change from the prior month.
Airline fares shot up 1.2 percent and tobacco prices rose 0.5 percent.
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Britain edged out of deflation last month, though economists said recent drops in commodity prices were likely to keep interest rates lower for longer. Hospital costs, however, fell 0.2 after rising in October. The ONS said lower energy prices were less of a drag on inflation in November than in previous months.
