Jan UK Inflation Up On Furniture

JAN CPI -0.2% M/M, +0.7% Y/Y VS +0.6% Y/Y DEC

JAN CORE CPI -0.5% M/M, +1.4% Y/Y VS +1.4% Y/Y DEC

JAN OUTPUT PPI +0.5% M/M; -0.2% Y/Y VS -0.4% Y/Y DEC

JAN INPUT PPI +1.2% Y/Y VS +0.2% Y/Y DEC

Y/Y inflation edged higher to 0.7% in Jan, coming in stronger than markets predicted (BBG: 0.5%). Nevertheless, this marks the 18^th straight reading below the BOE 2.0% target. Core inflation remained unchanged at 1.4% in Jan, coming in stronger than expected (BBG: 1.2%). The largest upward contribution came from furniture and household goods as well as restaurants and hotels and food prices. The ONS noted less discounting this year on specific items, largely due to less New Year Sales activity. Prices for furniture and household goods rose 1.0% in Jan, adding 0.1pp to CPI growth, while accommodation services added 0.11pp to price growth and food prices contributed 0.08pp. Due to widespread sales the largest downward contribution came from clothing and footwear, shaving off 0.17pp of CPI growth. In January 8.3% of items were unavailable, 60 items more than in the previous month. Output inflation remained ticked up to -0.2% in Jan, showing the 11^th consecutive negative reading. Input inflation improved to 1.3% which was led by an upward contribution of metals and non-metallic minerals.