United Kingdom Inflation January 2020

United Kingdom

United Kingdom: Inflation jumps in January but stays below-target

February 19, 2020

Consumer prices declined 0.3% month-on-month in January, following December’s flat reading. January’s figure was driven by lower prices for food and clothing.

Inflation rose from 1.3% in December to 1.8% in January on higher fuel prices, marking a six-month high and above market expectations, but still below the Bank of England’s (BoE) 2.0% target. Core inflation—which excludes food and energy costs—was also up, to 1.6% in January from 1.4% in December. Coupled with stronger economic activity at the outset of the year, higher inflation could discourage the BoE from cutting rates in the near-term.

The Bank of England sees inflation at 1.5% in Q4 2020 and 2.0% in Q4 2021. FocusEconomics Consensus Forecast panelists expect inflation to average 1.7% in 2020, down 0.1 percentage points from last month’s forecast, and 1.9% in 2021.

Author:, Economist

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United Kingdom Inflation Chart

United Kingdom Inflation January 20 20

Note: Annual and monthly variation of consumer price index in %.
Source: Office for National Statistics (ONS) and FocusEconomics calculations.

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