UK consumer inflation down in January

| February 13, 2007 | 0 Comments

UK consumer inflation down in January

The UK Consumer Prices Index was down to 2.7 percent in January, according to the Office of National Statistics data released Tuesday, down from 3 percent in December. The decline in consumer inflation was greater than had been anticipated. In addition, the Retail Price Index also was lower than had been expected, dropping from 4.4 percent in December to 4.2 percent in January. The RPI is the measure used in most wage negotiations and includes mortgage interest payments.

While the 3 percent level was not maintained, relieving the Bank of England’s governor from having to formally explain the rise to the government, it was still above the government target of 2 percent, which it has done for the past nine months.

Analysts are mixed in the opinion of what the new data means for UK interest rates. Some believe that inflation will fall further in the next few months due to such factors as announced decreases in the price of gas and electricity, lessening the probability that the Bank will raise interest rates further. On the other hand, some analysts believe that inflation will remain above the target and that the Bank will hike rates at least once more this year.

Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply

Visited 1176 times, 1 so far today