Belfast Telegraph

Thursday 26 May 2016

Consumer inflation up as air fares soar by 46%

By Holly Williams

Published 20/01/2016

Danske Bank's Angela McGowan
Danske Bank's Angela McGowan

The rate of Consumer Price Index (CPI) inflation has gone up because of to volatile conditions including air fares.

CPI rose to 0.2% in December from 0.1% in November, the Office for National Statistics (ONS) said.

A Treasury spokesman said: "Inflation at 0.2% continues the trend we've seen over the past year where low inflation, driven by falls in food and fuel prices, has supported family incomes and household budgets.

"Given the uncertain backdrop presented by the global economy, it's vital we continue working through the plan that is delivering growth at home and security in the face of risks abroad."

Danske Bank chief economist Angela McGowan said the data did not signal underlying pressure but that "volatile components" such as air fares were to blame.

She added: "Air fares surged by 46% month on month from November to December - the highest since 2002. This alone pushed CPI inflation up by 0.14 percentage points.

"Air fares are also the main reason why core inflation was much higher than expected."

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