Rising alcohol costs pushes up inflation

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INFLATION edged up to its highest rate for a year last month as rises in the price of alcohol pushed up the cost of living.

The Consumer Prices Index measure of inflation rose to 0.3 per cent in January from 0.2 per cent in December, according to the Office for National Statistics.

Alcohol and tobacco rose by 1.3 per cent, compared with January 2015, when there were heavy discounts on beer.

Alcohol costs shot up 5.2 per cent between December and January, with spirits increasing by 7.5 per cent, beer climbing by 3.6 per cent and wine up 4.8 per cent.

The ONS said inflation also rose as fuel and food prices dropped less than they did a year ago.

But despite the rise in CPI, inflation still remains historically low, with the Bank of England predicting inflation to remain far below the government’s two per cent target for some time yet.

James Tucker, ONS head of CPI, said: ‘While still at historically low levels, CPI has edged up to its highest rate for a year.

‘The main reason for the slight rise in inflation was fuel prices falling by less in January than they did at the same point in the previous year.

‘Clothing, food and alcoholic drinks also helped to push up inflation, offset by falling air fares.’

The increase to 0.3 per cent marked the third month in a row that CPI has risen, with the rate in January being the same as it was in January 2015.

Food prices continued to fall last month, but less than a year ago – by 0.6 per cent between December and January against a one per cent fall a year earlier.