Year-on-year consumer price inflation was 7.9% in January 2011, up from 7.4% in December. Although this was largely explained by unusually large increases in the costs of education (levies at government schools were adjusted for the first time in several years), international prices for commodities, including food and oil, will also contribute to inflationary pressure; petrol prices were increased in early February. Although domestic inflationary pressure will ease as the impact of the VAT increase falls away and government expenditure is reduced, we expect annual inflation to remain outside the target range until the middle of 2012, averaging 7.5% in 2011 and 6.3% in 2012.