LONDON, (Reuters) - British inflation returned to positive territory for the first time in four months in November, but remained close to zero as it has for most of this year, official figures showed on Tuesday.
The Office for National Statistics said annual consumer price inflation rose 0.1 percent last month from October’s reading of -0.1 percent, in line with economists’ expectations in a Reuters poll, despite an unexpected fall in clothes prices.
Britain’s inflation has stuck in a narrow range between plus and minus 0.1 percent since February, largely due to a slump in oil prices late last year, and is far below the Bank of England’s 2 percent target.
But strong growth in Britain’s economy means the BoE’s policymakers have been less worried about persistent deflation than some of their euro-zone colleagues were earlier this year, though they are still some way from raising interest rates.
Last month the BoE forecast inflation would stay below 1 percent for the first half of next year, and since then oil prices have fallen further to near their lowest since 2008.
Not all the shortfall in inflation is due to low oil prices, however, and on Monday BoE Deputy Governor Minouche Shafik said wages would need to rise further before she felt ready to lift interest rates from their record low.
The ONS said lower energy prices were less of a drag on inflation in November than in previous months.
But clothing prices were the biggest drag on inflation after they recorded an unprecedented monthly fall between October and November, usually a period of higher prices as consumers shop before Christmas. The ONS said that it recorded prices before so-called ‘Black Friday’ discounts took effect.
Core CPI -- which strips out moves in the price of energy, food, alcohol and tobacco -- rose to 1.2 percent from 1.1 percent in October -- like for headline CPI, the strongest rise since July and in line with economists’ forecasts.
Retail price inflation -- an older measure which the ONS says is no longer accurate but is still used to settle inflation-linked government bonds and many commercial contracts -- jumped to 1.1 percent from 0.7 percent, the sharpest month-to-month pick-up in the annual rate in over three years.
Factory gate prices fell a shade more than expected, dropping by 1.5 percent after a 1.4 percent fall in October.
The ONS also released figures for house price inflation in October, which showed the fastest price growth since March, with a 7.0 percent annual rise across the United Kingdom as a whole compared with 6.1 percent in September.
Prices in London alone rose by 7.7 percent.
Reporting by David Milliken and William Schomberg
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