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.
Author: Oliver Reynolds, Economist