UK CPI: Inflation rate falls back in February as discounted clothes offset rising petrol prices
The UK’s Consumer Prices Index (CPI) slipped in February compared to the previous month as rising petrol costs failed to offset discount clothing and footwear.
UK CPI rose 0.4 per cent in the 12 months to February, down from a 0.7 per cent rise in January.
On a monthly basis, CPI rose by 0.1 per cent in February 2021, compared with a 0.4 per cent rise in February 2020, the Office for National Statistics said this morning.
Falling prices for clothing, second-hand cars, and games, toys and hobbies drove the inflation rate downwards.
Clothing and footwear prices fell 1.5 per cent between January and February, compared with a rise of 0.9 per cent in 2020.
Prices usually rise between those two months due to the end of seasonal discounting but the latest coronavirus lockdown has resulted in the closure of non-essential stores and again impacted demand for new clothing and shoes.
Womenswear was the worst affected category during the period.
There was also a large downward contribution from recreation and culture, with prices little changed between January and February this year, compared with a rise of 0.4 per cent last year.
Rising fuel prices partially offset the impact of falling clothing prices.
Between January and February this year, the cost of petrol rose by 3.6p per litre, to stand at 120.2p per litre, and diesel prices rose by 3.4p per litre, reaching 124.6p per litre.
Samuel Tombs from Pantheon Macroeconomics gave his predictions for prices as we head into summer.
“Looking ahead, we continue to think that the headline rate of CPI inflation will jump to within a whisker of the two per cent target by May, before climbing a little further towards the end of this year.
“This pick-up, however, will be driven primarily by a rebound in energy’s contribution to the headline rate in the spring, especially in April when the default tariff cap for natural gas and electricity prices will jump by 9.2 per cent.
“Food inflation also likely will increase, to slightly exceed zero, towards the end of this year, given that food producer output prices and import prices both have been rising gently,” he added.