UK CPI (Feb) – 22/03 – falling energy prices have offered some respite to hard-pressed consumers in recent months, most notably at the petrol pumps. The onset of spring and warmer weather could also offer some relief, however, at the last set of CPI numbers in January, headline inflation fell to 10.1%, while core prices also fell back from 6.3% to 5.8%.
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While this is welcome it is little comfort given that food prices have continued to rise sharply, rising 16.7% in January. One other thing that we also know about inflation in the UK is that it goes up quickly and comes down slowly, and with wage inflation also rising it is likely to remain sticky. It's also important to remember that it is still 5 times higher than the Bank of England's 2% target, even if we are seeing some predictions that it could fall back to 2% by the end of this year. Expectations are for headline inflation to fall to 9.8% and core prices to 5.7%.
