MNI 5 Things: UK Headline CPI Falls on Fuel; Core Inflation Up

By Jai Lakhani Laurie Laird

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

published Wednesday by the Office for National Statistics.

     - Inflation abated to an almost 24-month low 2.1% in December. Whilst in

line with analyst's forecasts, the out-turn fell significantly below the Bank of

England's forecast of 2.4%.

     -A 4.4% fall in fuel prices between November and December accounted for

much of the decline in headline inflation. However, core inflation accelerated

to 1.9%, the first rise since August, lifted by hotel prices and mobile phone

charges.

     - The rise in underlying inflation suggests a stirring of

domestically-generated inflation, raising questions over the BoE's projection of

CPI falling below its 2.0% target early this year, particularly with a potential

nose-dive in sterling following a disorderly Brexit.

     -Also helping a fall in the headline rate was tobacco prices falling a

touch this December compared to last December where duties being imposed led to

a rise in prices. The result meant alcoholic beverages and tobacco shaved 0.07pp

from the change in CPI.

     - London house prices slumped by another 0.7% in November, the eighth fall

in nine months, the longest stretch of weakness since a stretch of 15 declines

ending in September of 2009.

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

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

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