Official data showed that UK consumer price inflation fell more than expected in January to 10.1% from 10.5%. The Bank of England monitors underlying inflation, which fell.
A Reuters poll of economists predicted that the annual CPI rate would fall to 10.3% in January from October’s 41-year high of 11.1%.
Hence, eroding household living standards.
The Office of National Statistics reported Wednesday that core CPI, which excludes energy, food, alcohol, and tobacco, fell to 5.8% in January from 6.3% in December.
The pound fell against the dollar and euro after the data was released.
After seeing signs that consumer prices were leveling off, the Bank of England intimated earlier this month that it might stop raising interest rates.
Even though the markets expect another BoE Bank Rate hike next month.
Wednesday’s data may suggest Bank Rate has reached its peak.
Services prices, under BoE scrutiny, rose 6.0% annually in January, down from 6.8% in December.
“While any fall in inflation is welcome, the fight is not yet over,” said Finance Minister Jeremy Hunt.
Why we must follow the plan to lessen inflation this year, reduce debt, and grow the economy.
“High inflation chokes growth and hurts families and businesses.”
