UK inflation stirs in January to 12 month high

An easing in the recent dramatic fall in petrol prices saw inflation, as measured by the Consumer Prices Index, rise by 0.3 per cent, the Office for National Statistics said.

Annual inflation has been below the Bank of England’s 2 per cent target for two years.

Last year it was zero and the continuing trend makes the chance of an interest rate rise in the near future unlikely.

The BoE said earlier this month that it expected inflation to stay below 1 per cent this year.

But January’s slight rise was aided by smaller falls in food and fuel prices than a year ago.

North Sea oil prices dropped to a 12 year low of $27.10 last month and have almost halved over the past 12 months.

However, the ONS measure of fuels and lubricants costs was only 7.3 per cent lower than in January 2015, the smallest drop since November 2014.