UK Retail Inflation Report summary
December 2020Period covered: Period covered: 01 Nov 2020 – 31 Nov 2020
CPI inflation slowed in November, rising by just 0.3% year-on-year, down from the 0.7% rise in the previous month and below market expectations of a 0.6% rise.
Inflation is currently just shy of the 0.2% five-year low recorded in August as well as being significantly lower than the Bank of England’s target.
Increased restrictions due to Covid-19 resulted in 72 basket items being unavailable (13.9%) in November, up from eight items last month, but lower than 90 in April (first full month of lockdown).
The largest downward contribution to the change in the 12-month inflation rate came from Clothing & Footwear (-0.24 percentage points), with prices falling by 2.7% between October and November this year, compared with a 1.0% rise a year ago. Discounting was said to be more prevalent this year compared with last (Black Friday discounts lasting longer), bucking the long term trend of prices rising In November. The majority of the downward pressure came from womenswear with a smaller contribution from menswear. The annual decline of 3.6% was the sharpest since January 2010.
The second-largest downward contribution came from Food & Non-Alcoholic Beverages (-0.11%) driven by a wide range of products, with prices falling this year compared to a rise a year earlier. Indeed, the annual fall in inflation of 0.6% was the deepest since December 2016.
Consumer Price IndexSource: ONS