The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.<\/p>\n
Headline inflation is down from 3.4% to 3.0% in January, largely as expected. It’s a consequence of a seasonal fall in air fares, lower fuel prices and the impact of last year’s private school VAT change dropping out.<\/p>\n
Most importantly, though, food inflation is down sharply \u2013 from 4.5% to 3.6%. That\u2019s roughly inline with BoE forecasts, but it should help the hawks become a little more relaxed about the upside risks to inflation. A big concern last year was that higher food inflation would spark a much wider and more persistent bout of price pressure. Those concerns now look overblown.<\/p>\n
But services inflation was stickier than expected in January. Importantly, that\u2019s not really because of quirks like air fares or holidays. In fact, we calculate that the Bank\u2019s preferred measure of \u2018core services\u2019 inflation nudged up from 4.0% to 4.3%, once volatile and indexed items are excluded. Catering \u2013 often seen as the archetypal service-sector category, one that\u2019s driven by underlying economic demand \u2013 has nudged a little higher over the past couple of months.<\/p>\n","protected":false},"excerpt":{"rendered":"The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it…\n","protected":false},"author":2,"featured_media":432003,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[59,57,58,50,56,54,55],"class_list":{"0":"post-432002","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-kingdom","8":"tag-gb","9":"tag-great-britain","10":"tag-greatbritain","11":"tag-news","12":"tag-uk","13":"tag-united-kingdom","14":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/432002","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=432002"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/432002\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/432003"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=432002"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=432002"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=432002"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}