UK CPI decelerates further to 1.8% y/y in January, misses estimates

The UK Consumer Prices Index (CPI) 12-month rate came in at 1.8% in January, down from December’s 2.2% and missing the 1.9% print expected, the UK Office for National Statistics (ONS) reported on Wednesday. 

Meanwhile, the core inflation gauge (excluding volatile food and energy items) arrived at 1.9% y/y versus 1.9% booked in December while matching the consensus forecast.

The monthly figures showed that the UK consumer prices dropped to -0.8% in January, missing -0.7% expectations and 0.2% last.

Main Points (via ONS):

“The largest downward contribution to the change in the 12-month rate came from electricity, gas and other fuels, with prices overall falling between December 2018 and January 2019 compared with price rises the same time a year ago.

These downward effects were partially offset by air fares, with prices falling between December 2018 and January 2019 by less than a year ago.”

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