Analysts at TD Securities point out that UK’s headline inflation came in a tick below market expectations, at 1.8% y/y, while core inflation held steady at 1.9% y/y.
“The headline figure, however, was exactly in line with the BoE's week-ago forecast, so should provide no surprises there. OFGEM's price cap on energy prices contributed to the weaker inflation figure, with household energy prices registering sharp declines in January.”
“With hard economic data deteriorating sharply amidst Brexit uncertainty, today's near-target inflation report provides little to chew on for markets. Also out this morning, Visa spending data for January paints a picture of downside risks to Friday's retail sales report.”
“Visa data suggests a fall of around half a percent, but the error bands around this data can be large in some months.”
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