Consumer prices in the UK remained at an elevated level in January as housing and insurance costs jumped. According the Office of National Statistics (ONS), the headline Consumer Price Index (CPI) rose to 4.0% in January after rising by the same range in the previous month. The CPI dropped by 0.6% on a MoM basis.
Meanwhile, core inflation remained stubbornly high during the more. The figure, which excludes the volatile food and energy prices, rose by 5.1% in January. It came in at minus 0.9% on a MoM basis.These numbers are significantly higher than the Bank of England’s target of 2.0%.
The report came a day after the UK released strong jobs numbers. The unemployment rate slipped from 4.1% in November to 3.8% in December. Wage growth also remained at an elevated level even as some companies like The Body Shop and Tata Steel remain on edge.
Therefore, with inflation falling, analysts expect that the Bank of England (BoE) will start cutting interest rates in the next few months. Most analysts expect at least three rate cuts this year since the economy is expected to remain under pressure this year. The GBP/USD slipped to 1.2560 after the report since the US released strong inflation numbers on Tuesday.
The next important UK news will come out on Thursday when the ONS will publish the latest GDP numbers. Economists expect these
This article first appeared on Invezz.com
