Inflation rates predicted to pick up

Surprisingly, inflation grew to 0.6% for December, up from the November rate of 0.3%. Despite the lockdown, with many pubs, restaurants and non-essential shops closed, it still remains well below the Bank of England’s 2% target. The rising cost of transport, increased prices for clothing, recreation and lifestyle items were offset by falling prices elsewhere. With the successful roll out of the vaccine and a likely reduction in restrictions, it is possible that inflation will pick up in the second half of the year, driven by consumer spending.