BCC Oil price fall will continue to dampen inflation

  • The consumer price index rose by 0.2% in the year to December 2015, compared with a 0.1% increase in the year to November 2015
  • Movement in transport costs, particularly air fares and motor fuels, were the main contributors to the rise
  • Downward pressures from alcohol, tobacco and food partially offset the rise
  • Goods annual inflation in December 2015 was -2.1%, while services annual inflation was 2.9%

Commenting on the Inflation Figures for December 2015, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:

“UK inflation is edging up slightly but remains very low, and inflationary pressures in the foreseeable future are set to remain very weak. Recent falls in oil and commodity prices will have a dampening effect on inflation, while labour costs remain subdued.

“Turmoil in the global economy and weak UK trade and manufacturing figures are powerful arguments for postponing any rise in interest rates. Our main policy priority must be to nurture the fragile recovery in the face of major global headwinds.”