Higher energy prices push annual inflation in OECD area up to 2.1%

by S. C.

An annual increase of 10.6% in energy prices pushed overall inflation up to 2.1% in the OECD area in the year to January 2010, compared with 1.9% in December 2009. Energy prices rose by 19.1% in the United States.

Consumer prices for food in the OECD area decreased by 0.7% in the year to January 2010, compared with a fall of 1.0% in December. Excluding food and energy, consumer prices rose by 1.6% in the year to January 2010, unchanged from December 2009.

Euro area annual inflation (HICP) rose slightly to 1.0% in January 2010, up from 0.9% in December but still subdued compared with the United States where inflation was 2.6%, Canada (1.9%) and the United Kingdom, which at 3.5% recorded the highest annual inflation among the G7 countries, partly reflecting the return to a 17.5% VAT rate. Annual inflation in Japan remained firmly in negative territory with prices falling by 1.3% over the year compared to a decline of 1.7% in December. Annual inflation was 1.3% in Italy, 1.1% in France and 0.8% in Germany.

Month-on-month, prices in the OECD area increased by 0.2% in January after being stable in December 2009. Month-on-month prices rose by 0.3% in the United States and Canada but fell by 0.8% in the Euro area (HICP).