UK Retail Inflation Report summary
March 2021
Period covered: Period covered: February 2021
Note: Reporting periods are either one or two months behind the current month as standard reporting practice. Certain data is undisclosed. Take out a free 30 day subscription trial to access this data or subscribe.
In February, the headline Consumer Price Index (CPI) rose by 0.00% year-on-year, down from the 0.7% rise in the previous month. The core inflation rate (excl. food & energy prices) also slowed, rising by 0.9% year-on-year from the 1.4% rise in January.
Increased restrictions due to Covid-19 resulted in 69 basket items being unavailable (8.3% of the basket weight) in February.
The largest downward contribution to the change in the CPI inflation rate came clothing and footwear (0.17 percentage points), with prices falling by 1.5% between January and February this year compared with a 0.9% rise a year ago, resulting in annual deflation of 5.7%. This is the first time prices have fallen between these two months for five years and it marks the sharpest annual decline since November 2009.
Food & Non-Alcoholic Beverages deflation slowed marginally in February to -0.6% year-on-year, from -0.7% in January. Upward pressure was exerted by vegetables, milk, cheese and eggs, and breads and cereals. This offset downward pressure from meat and the multiple-item category containing sugars, jam and chocolate.
Transport inflation accelerated further in February, rising by 2.4% year-on-year from the 2.1% rise in the previous month. Upward pressure was exerted by motor fuels, with both petrol and diesel prices rising this year compared with falls a year ago.
Housing, Water, Electricity, Gas & Other Fuels deflation was broadly unchanged in February, falling by 1.1% year-on-year, from -1.2% in the previous month. Upward pressure was exerted by the Housing and Liquid Fuels components.
The average price of a barrel of oil stood at $64 in March (as of 23 March). Whilst this is 146% up on a year ago, oil prices fell by 1% on the previous month. Demand has waned in recent weeks due to increased cases of the coronavirus in some parts of Europe. Ultimately however, the long-term outlook remains positive with prices expected to rise higher during 2021.
Food & Non-alcoholic Beverages Inflation – February 2021
Source: ONS
