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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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MNI DATA ANALYSIS: UK Feb Inflation Ebbs As Stg Effect Fades>
-UK Feb CPI +2.7% y/y vs +3.0% in Jan
-UK Feb Input PPI +3.4% y/y vs +4.5% in Jan
-UK Feb CPIH +2.5% y/y vs +2.7% in Jan
-UK Jan House Price Index +4.9% y/y vs +5.0% in december
By Laurie Laird and Jamie Satchithanantham
London (MNI) - Consumer price inflation moderated dramatically in
February, in line with the recovery in sterling over the same month a
year earlier, while intermediate inflation also ebbed.
The consumer price index increased by an annual rate of 2.7% last
month, the lowest rate since July of 2017, falling short of the MNI
median forecast of 2.8%, after a 3.0% rise in January.
Consumer transport prices rose by 0.5% between January and
February, or by 2.8% over February of 2016, a smaller rise than recorded
in January. As a result, the transport sector accounted for 0.1
percentage points in the fall in CPI.
Food prices rose by an annual pace of 3.3% last month, falling far
short of the January gain, subtracting 0.06 percentage points from the
change in CPI.
The result came below the Bank of England staff forecast of a 2.9%
annual rise in February as reported in the February Quarterly Inflation
Report. That takes inflation above the Bank's 2.0% target for the
twelfth straight month, just a day before the Bank's Monetary Policy is
due to consider interest rates.
Members of the MPC agreed that monetary policy could tighten
"somewhat earlier" and "by a somewhat greater degree" at their February
meeting, but analysts believe a rate hike is more likely to come in May,
with most predicting no change at Thursday's meeting.
Consumer prices rose by 0.4% between January and February, after
falling by 0.5% between December and January, compared to the MNI median
of a 0.6% monthly increase.
Stripping out food and energy, annual core consumer inflation
declined to 2.4%, the slowest pace of increase since July of 2017,
compared to the MNI median of 2.5%, down from the 2.7% pace recorded in
January.
CPIH, which regained its status as a national statistic with the
release of the July data, fell to an annual rate of 2.5% from 2.7% in
January. CPIH had been downgraded as a national statistic, but the Bank
of England continues to target CPI even with the recertification of
CPIH.
Intermediate price inflation also receded, as the plunge in
sterling following the vote to leave the European Union in June of 2016
dropped out of year-on-year comparisons. Sterling rose by an annual rate
of 1.8% in trade-weighted terms in February, reversing a 10.5% loss a
year earlier.
Producer input prices slumped by 1.1% between January and February,
for an annual gain of 3.4%, down from 4.5% in January and 19.3% in
February of 2017. That's the slowest pace of increase since June of
2016. Analysts surveyed by MNI forecast a 3.7% increase in producer
input prices.
Imported material prices, which comprise some two thirds of inputs
to the manufacturing sector, increased less intensely in February. The
annual rate fell 0.6pp to 3.0%, below the 19.2% result a year ago.
Output PPI also moderated, registering no change between January
and February, for a 2.6% annual gain, below the MNI median of a 2.8%
rise, the lowest rate of increase since November of 2016.
Retail price inflation ebbed, with RPI rising by an annual rate of
3.6% in February, down from a 4.0% pace in January, below the MNI median
of 3.7% increase. That's the lowest rate since July of last year.
Stripping out mortgage interest payments, RPI-X rose by an annual
rate of 3.6% in February, the lowest pace since March of 2016, after
rising by 4.0% in January.
Meanwhile, UK house price inflation abated modestly in January,
with the official House Price Index rising by an annual rate of 4.9%,
down from the revised 5.0% annual pace recorded in December. That's the
slowest pace of increase since September of 2017.
-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com
[TOPICS: M$B$$$,MABDS$]
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.