london skyline

United Kingdom Inflation January 2019

United Kingdom: Inflation falls below the Bank of England’s target in January

Consumer prices declined 0.8% in January over the previous month, contrasting December’s 0.2% rise. January’s reading was underpinned by lower prices for clothing and footwear; transport; housing and energy; and furniture, household equipment and maintenance.

Inflation fell from 2.1% in December to 1.8% in January on lower energy prices, below the Bank of England’s (BoE) 2.0% target and marking the lowest reading since January 2017. Core inflation—which excludes food and energy costs—was stable at 1.9%, while annual average inflation dipped from 2.5% in December to 2.4% in January.

Looking ahead, inflation is likely to stay close to the BoE’s target, supported by the fall in oil prices in late 2018. However, solid wage growth will provide upward pressure. The outcome of the Brexit process is a key risk to the inflation outlook, as a no-deal Brexit could lead to a sharp currency depreciation and hence fan price pressures, even in the face of weaker domestic demand.

UK Inflation Forecast

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest