February 17 2015

- Annual CPI inflation in January 2015 was 0.3%, a historically low level, down from 0.5% in December 2014

- Falling prices for motor fuels and food were the main contributors to the slowdown in inflation

- Goods price inflation in January 2015 was minus 1.5%, while services inflation was 2.4%

Commenting on the CPI inflation figures for January 2015 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce said: “Historically low inflation in January confirms that inflationary pressures in the UK will remain very weak over the next year. While the Bank of England has indicated that there may be a period of deflation in the coming months, this poses little risk since much of the inflationary weakness is due to declines in energy and food prices.

“In fact, these figures show that excluding energy and food, inflation edged up in January from 1.3% to 1.4%. Furthermore, in the service sector, which accounts for 80% of the UK economy, annual inflation has remained persistently above the 2.0% target.

“With inflation set to remain low, these figures further strengthen the case for the MPC to keep interest rates on hold until at least 2016.”