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The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.7% in December 2017, down from 2.8% in November 2017. Following a steady increase from late 2015, since April 2017 the CPIH rate has levelled off, ranging between 2.6% and 2.8%. The downward effect came mainly from air fares, along with a fall in the prices of a range of recreational goods, particularly games and toys. The downward contributions were partially offset by an increase in tobacco prices, reflecting duty increases that came into effect following the Autumn Budget, along with an increase in petrol and diesel prices. The Consumer Prices Index (CPI) 12-month rate was 3.0% in December 2017, down from 3.1% in November 2017.

The headline rate of inflation for goods leaving the factory gate (output prices) rose 3.3% on the year to December 2017, up from 3.1% in November 2017. Prices for materials and fuels (input prices) rose 4.9% on the year to December 2017, down from 7.3% in November 2017. All industries provided upward contributions to output annual inflation; the largest contribution was made by food products. Prices of imported materials and fuels increased 4.5% on the year to December 2017, down from 6.7% in November 2017.

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