Deflation in the UK has proved to be fleeting after new data showed prices rose by 0.1 per cent last month, reversing the slight drop in April.
Data from the Office for National Statistics showed the Consumer Prices Index (CPI) rose marginally as upward pressure on the oil price fed through to higher fuel costs than in April.
The biggest contributor to the increase was transport prices, particularly an increase in air fares during the Easter break that was not captured in March, the Office for National Statistics said.
The ONS pointed out that while the Consumer Prices Index inflation had risen marginally month to month, the price of food and motor fuel was still lower than a year ago, meaning that overall inflation had been pulled down.
In spite of the move back towards rising prices, Samuel Toombs, economist at Capital Economics, predicted inflation was likely to remain ‘comfortably below’ the 2 per cent target set by the Bank of England throughout this year and the next.
“The big picture is that inflation is likely to remain extremely low throughout the rest of 2015,” the economist said.
“Looking ahead, lower commodity prices are likely to ensure that CPI inflation hovers within a range of 0 per cent to 0.5 per cent over the next six months.
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