Inflation in the UK, as measured by the Consumers Prices Index (CPI), rose to 0.3% in January; it's highest rate for 12 months, according to the Office for National Statistics (ONS).
The ONS said the easing decline of petrol prices and smaller falls in food prices were largely behind the increased inflation.
This time last year, inflation was at zero and it spent much of 2015 between -0.1% and 0.1%. The latest figures mean that inflation has fallen below the Bank of England's official target of 2% for over two years. And it doesn't expect that to change anytime soon, predicting that inflation will remain below 1% for the rest of 2016.
Mike Cherry, policy director for the Federation of Small Businesses (FSB), said: “Small businesses are already under pressure with a number of challenges on the way in 2016. New business costs like pensions auto-enrolment, the introduction of the National Living Wage, and changes to taxation on dividends are all coming together and small firms will need time to adjust.
“We urge the Chancellor to consider these challenges when drawing up his Budget in March. What smaller businesses need is real progress on the fundamental reform of business rates and firm commitment to simplification of the tax system.”
James Sproule, chief economist at the Institute of Directors, said: “Despite the slight increase in the headline rate, we are still considerably off a level of inflation which could be considered ‘normal’. We should be in no doubt, this is as good as it gets as far as inflation is concerned. Further volatility on the financial markets could undermine consumer confidence and might encourage people to save, rather than spend, the low-inflation windfall.”
