MNI 5 THINGS: UK CPI Falls Below BOE Target on Energy Prices

By Jai Lakhani and Laurie Laird

     LONDON (MNI) - The following are the key points from inflation data

published Wednesday by the UK's Office for National Statistics.

     -- Inflation below the Bank of England's 2.0% target for the first time

since January 2017, dropping to 1.8%, in line with the Bank's staff forecast.

     -- However, the decline was largely due to temporary factors, particularly

Ofgem's cap on household energy prices. As predicted by MNI, utility prices

accounted for the bulk of the decline in inflation, shaving 0.22 percentage

points from the change in annual CPI.

     -- As forecast in the MNI preview, clothing and footwear m/m declined again

in January, something it has done every January since 1989. The decline of 4.3%

m/m matched the average decline seen in January and took 0.13pp off the headline

rate.

     -- Fuel prices continued to ease in January and, in line with MNI

calculations, took 0.08pp off the headline rate.

     -- House price inflation slipped to a more-than-five-year low of 2.5%, with

London prices declining by an annual rate of 0.6% in December. London prices

have failed to record an annual increase in each of the past 10 month.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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