Central bankers wanted higher inflation rates and, in the U.K, they now have it. However, the latest batch of consumer inflation figures out of the U.K reflects a pause in what has been a rapid increase in British inflation.
Figures released by the Office of National Statistics indicate the headline consumer price index (CPI) fell back by 0.5% in January but still grew by 3.0% over the last 12 months. While the increase in the CPI in January marks a sharp turnaround from December’s 0.3% increase, the annual growth rate remained unchanged at 3.0%.
Core inflation rates, which strip out energy, food, alcohol and tobacco prices, are generally less volatile than headline rates. The latest figures are unsupportive of this claim and core CPI fell by 0.9% in January. However, the annual growth rate increased from 2.5% in December to 2.7% in January.