LONDON, Jan. 16 (Xinhua) -- Inflation fell in the British economy, despite continued pressures from the unresolved Brexit process, data on Wednesday revealed.
Consumer Price Index (CPI), a main gauge of inflation, fell in December to an annual rate of 2.1 percent, according to latest statistics from Office of National Statistics (ONS), the official data body.
This was lower than November's annual rate of 2.3 percent, and takes the CPI measure closer to the central bank the Bank of England's (BoE) primary monetary target of 2 percent.
Falling crude oil prices have led to gasoline prices falling considerably over December, compared with a rise in the costs in the previous year's CPI print, and gasoline prices were at their lowest last month since April 2018.
Further downward pressure on CPI came from air and sea fares, which rose over the month to reflect seasonal increased demand but by less than the previous year's increase, helping to lower the CPI rate.
The uncertainties around the Brexit process, heightened by the House of Commons emphatically rejecting Prime Minister Theresa May's Brexit Withdrawal Agreement on Wednesday, remain the principal threat to the continued disinflationary trend in CPI.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, a London-based economics analysis group, said he expected inflation figures to continue downwards and to "average just 1.8 percent over the course of the year."
"Modestly below-target inflation, however, won't stop the BoE's Monetary Policy Committee from hiking the Bank Rate, as the committee believes that interest rates still are well below neutral levels and that no spare capacity exists."
Tombs added that a clear path for "probably as soon as May."
