UK Inflation At 6-month High On Higher Petrol Prices
19 Febbraio 2020 - 07:36AM
RTTF2
UK consumer price inflation rose more-than-expected in January,
after easing in the previous month, to its highest level in six
months, led by higher petrol prices.
The consumer price index rose 1.8 percent year-on-year following
a 1.3 percent increase in December, preliminary data from the
Office for National Statistics showed on Wednesday. Economists had
forecast 1.6 percent inflation. The January inflation rate was the
highest since July, when prices rose 2.1 percent annually.
Meanwhile, core inflation which excludes energy, food, alcoholic
beverages and tobacco, climbed to 1.6 percent in January from 1.4
percent in December. In November, it was 1.7 percent. Economists
had forecast core inflation of 1.5 percent. Inflation based on the
CPI including owner occupiers' housing costs (CPIH) climbed to 1.8
percent from 1.4 percent. This rate was also the highest since
July. Housing and household services, transport, clothing and
footwear, and restaurants and hotels made upward contributions to
inflation, while furniture, household equipment and maintenance;
and food and non-alcoholic beverages acted as drags.
On a month-on-month basis, consumer prices decreased 0.3
percent, after remaining unchanged in the previous month.
Economists had expected a 0.4 percent fall. The CPI decline was the
first in three months. The core CPI fell 0.6 percent from the
previous month. "The rise in inflation is largely the result of
higher prices at the pump and airfares falling by less than a year
ago," ONS Head of Inflation Mike Hardie said. "In addition, gas and
electricity prices were unchanged this month, but fell this time
last year due to the introduction of the energy price cap."
ING economist James Smith said the rising trend in inflation is
unlikely to last and expects price growth to slow to 1.1-1.2
percent by June, driven by falls in household energy costs.
"[Bank of England] Policymakers will be looking for signs that
rising business sentiment is translating into faster economic
growth, although we think it would take a material deterioration in
the economic backdrop for them to ease policy in the near-term,"
Smith said. In January, the central bank projected to remain below
the 2 percent target throughout this year and then expect it to
rise towards the target over 2021 and reach 2 percent in the first
quarter of 2022.
ONS data also showed that output price inflation accelerated to
1.1 percent from 0.9 percent in December. Economists had expected 1
percent price growth. This was the highest rate since September.
The input price inflation climbed to 2.1 percent from 0.9 percent
in December. Economists had expected a 0.1 percent fall. Crude oil
remained the largest contributor to cost inflation, while other
components also influenced. The house price inflation rose to 2.2
percent in December from 1.7 percent in November. For the first
time since February 2018, all regions have seen a positive annual
growth rate, the ONS said. London house prices logged its strongest
growth since October 2017.
The ONS noted that the increased London house price growth may
reflect a larger shift in the type of properties being sold than
usual, with more sales of very high value properties.
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