Transport prices were the biggest contributor to the decline in inflation, falling 0.1 per cent to a negative 0.18 per cent. Air transport prices were down 14.2 per cent between the two months, partly due to the timing of Easter. This was partly offset by rising prices for culture and recreation, which were up 0.8 per cent during the same period.
2015 was a year of historically low inflation, with CPI hovering around zero for the majority of the year. The Bank of England does not expect inflation to reach its 2 per cent target until mid-2018. Senior economist at Hargreaves Lansdown Ben Brettell reckons this means the Monetary Policy Committee will need to raise interest rates sooner if it wants to avoid inflation exceeding this target.
