You are here
Sliding oil sends British inflation to 12-year low
[LONDON] Britain's annual inflation rate slid to a 12-year low of 1.0 per cent in November, driven down by tumbling oil prices, official data showed on Tuesday.
The 12-month Consumer Price Index (CPI) dropped from a rate of 1.3 per cent in October, the Office for National Statistics said in a statement.
"Food and motor fuel prices, which have historically been upward contributors to the CPI 12-month rate, are currently reducing it by 0.4 per centage points," the ONS noted.
Oil suffered another dizzying plunge on Tuesday, with benchmark Brent North Sea crude sliding to a five-year low under US$60 a barrel as markets were rocked by shrinking Chinese manufacturing and fresh turmoil in Russia, traders said.
"Inflation has been steadily falling over the second half of 2014, and the recent sharp fall in the oil price has accelerated this trend," said Ben Brettell, senior economist at stockbrokers Hargreaves Lansdown.
Britain's economy is outperforming the neighbouring eurozone but in recent months market analysts have raised concerns over the impact of falling inflation on British wage growth.
With many workers failing to win salary increases, the government has seen tax receipts shrink, hindering its bid to shrink the deficit.