UK inflation reaches highest since June 2014

February 15th, 2017

Mainly as a result of the rising price of fuel, inflation has reached its highest rate for two-and-a-half years.

Annual inflation reached 1.8% last month according to the Office for National Statistics (ONS). This figure is up on a rate of 1.6% in December 2016.

This will be the fourth consecutive month of the rate rising, seeing inflation increase to its highest since June 2014.fuel unleaded diesel

According to the RAC, fuel prices, which are recognised as a major contributor to inflation figures, hit a two-year high in early February 2016.

The ONS said food prices also contributed to the rise in inflation. Prices remained unchanged between December 2016 and January 2017, having fallen the previous year.

Will the rise in inflation affect me?

Due to the weaker pound, inflation is expected to pick up later this year, which will make imported goods more expensive.

Even if goods are produced in the UK, the imported raw materials are being charged at a higher rate to manufacturers, which eventually will be passed on to the consumer.

The UK is the 5th largest importer in the world. Given the UK’s population of 64.1 million people, its total $625.7 billion in 2015 imports translates to roughly $9,763 in yearly product demand from every person in the country.

The Bank of England predicts the inflation rate will hit 2.7% in 2018.

The latest increase in the inflation rate takes it closer to the Bank of England’s predicted target rate of 2%.

Rate speculation

Mike Prestwood, ONS head of inflation said: “The costs of both raw materials and goods leaving factories both rose significantly, mainly thanks to higher oil prices and the weakened pound.”

Chief business economist at analysts IHS Markit, Chris Williamson said: “While the further upturn in price pressures will fuel speculation that interest rates may start to rise later in 2017, the most likely scenario remains one of policy staying on hold over the next two years as the economy navigates through Brexit.

“Further upward pressure on prices looks inevitable in coming months as energy costs continue to climb and firms pass rising costs on to customers, pushing inflation up towards 3.0% in the second half of the year.

“Wage growth has crept up to 2.8%. However, our expectation is that it will slow, or at least remain muted, in 2017 as the labour market cools, providing the Bank of England with leeway to keep policy on hold.”

What our clients are saying

We have just had a delivery this morning. The driver is new and I just wanted you to know how efficient he was and very friendly. He told us about your new vehicle which will be able to access hard to reach properties if the weather is bad and the big tankers cannot get access. Mr S
We had an exceptionally busy period at the pub in summer and ran out of gas from a delivery which would normally have lasted much longer. I rang Northern Energy mid-morning when we discovered our situation and they delivered within 20 minutes! We were all very impressed by the speed and helpfulness of the service which got us out of a potentially very difficult situation. Lunch service went on as normal in our pub.
Thank you, Northern Energy!
Mrs R - Publican
Excellent service , easy to order with polite efficient sales staff. Delivery drivers friendly and reliable, very impressed with all round customer service.  Mrs J
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My husband and I are very pleased with your overall service and have recommended your service to other people round about. We rate you 10. Many thanks Mrs B
Yes I would recommend you, I score 10. The 'PPP' keeps my tank topped up, no VAT to pay. A very good efficient firm with nice friendly delivery men. Thank you Mr W
Been with you now since 2005 would recommend you to anyone Mr W
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Last year I recommended you to my neighbour and he is equally happy with your service. Mrs S
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We find the whole service really easy & efficient Mrs M
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We have been very impressed with the service received from Northern Energy. The team are always very friendly and always willing to help in any which way they can. If we are cancelling a delivery there are never any questions asked. Recently we had a new oil tank fitted and the oil was delivered within two days of being ordered (we had allowed up to 5 days). Mr K
As a customer I love the all inclusive package of oil and maintenance that you offer. As a second home owner, we never run out of oil like we do ‘at home’ because you keep us ‘topped up’. Mr C

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