Inflation Above Target For 12th Consecutive Month
Data from the Office for National Statistics (ONS) reported the Consumer Price Index (CPI) rate of inflation remained stayed at December’s 3%.
This came slightly above expectations that it would drop to 2.9% after December saw a relief from 3.1% inflation a month prior.
Inflation for food price has dropped 0.1% over the month due to the large falls in the cost of meat, oil, cheese, milk and eggs.
This has marked a welcome slow down following continually rising prices since 2016.
Inflation in January continued to be driven by clothing inflation, having seen a weaker drop than December at 3.7%.
“Economists have been expecting inflation to gradually fall back to the two per cent target over the coming year or so, starting today with a drop to 2.9 per cent,” Hargreaves Lansdown’s senior economist Ben Brettell said.
In fact the rate remained at 3%, with rise in prices driven by clothing, footwear and recreational goods/services. Inflation’s now been above target for 12 straight months.
UK’s ongoing cost-of-living squeezed by persistent inflation. Currently the wage growth is running at 2.5%, so the spending power of pay packets still falling in real terms.
“We’ll be looking for an increase when the ONS reports next week. The Bank of England has said it expects pay growth to accelerate in 2018, and this is yet other reason higher interest rates are on the table.”