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Inflation in the United Kingdom has increased more than expected at a 10-month summit of 3% in January, highlighting the challenge of the Bank of England, as it is faced with persistent prices and a weakened economy.
The annual price growth rate was higher than 2.5% recorded in December and for 2.8% forecasts by economists interviewed by Reuters, the National Statistics Office said Wednesday. It was also well above the recent 1.7% lower in September.
The increase was motivated by aerial declines which drop less than usual in January, higher costs for private schools after the government has imposed the VAT of higher costs and costs for food and drinks not Alcoholic, said the ons.
Inflation of services, a key measurement of underlying prices for prices for prices, increased to 5% in January, against 4.4% in December, but was lower than 5.2% BO expectations. Central inflation, which excludes energy, food, alcohol and tobacco, increased to 3.7%, against 3.2% in December, in accordance with the expectations of analysts.
Ruth Gregory, Economics Capital Economic Economist, said the concern of BOE would be tempered by the role of air prices in the January increase and the lower than expected increase in services.
“We doubt that [inflation data] The Banque of England will prevent interest rates more, but this will mean that it continues to reduce rates only slowly, “she said.
The BOE said this month that price pressures were on “a bumpy path” as it provides inflation Would have reached 3.7% in the middle of the year, powered by higher world energy costs. The Central Bank said it expected inflation later falling to its target of 2%.
Salaries growth in the United Kingdom excluding premiums reached an annual rate of 5.9% in the three months and December, showed figures published on Tuesday. But economic growth was low, the official data last week showing a marginal expansion of 0.1% in the three months and December, after the stagnation of the previous quarter.
BOE Governor Andrew Bailey said on Tuesday that the central bank had been able to reduce interest rates three times since last summer due to a drop in inflation, which reached a 41-year summit of 11.1% in October 2022, and because “we are faced with a low growth environment in the United Kingdom”.
He also reiterated BOE’s intention to adopt a “progressive and prudent” approach to interest rate reductions, adding that an increasing increase in inflation this year was among the “challenges” to which the central bank is confronted.
After the figures on Wednesday, the merchants continued to bet that the BOE would deliver two additional reductions in rates of the rates this year after lowering the costs of borrowing this month.
The yield on the price at two years rate increased by 0.04 percentage points to 4.28%. The pound fell 0.2% compared to the day against a largely stronger dollar at $ 1,258.
Zara Nokes, global market analyst at JPMorgan Asset Management, said that week’s data would lead to the “headache” BOE and that civil servants should put a “higher weight on the risks of inflation up by opposition to any moderate cooling in economic activity ”.
According to ONS data, the annual inflation rate in the education sector increased to 7.5% in January, compared to 5% in December, reflecting a 12.7% increase in the cost of schools After the government has taken the VAT from the costs.
The prices of food and non -alcoholic beverages increased by 3.3% in January, compared to 2% in December.
Responding to the figures on Wednesday, Chancellor Rachel Reeves said: “Since the elections, we have seen wages from year to year after inflation which has increased at the fastest rate – of an additional value of £ 1,000 per year on average – but I know that millions of families are still struggling to reach both ends. »»
The rebound in inflation is a blow for Reeves, which was criticized by companies for the October tax budget, with surveys suggesting that it loses public confidence.
An IPSOS survey this month revealed that 46% of voters thought that it was doing a bad job as a chancellor with only 16% positive, giving it the worst clear note since work took office in July.
Mel Stride, Chancellor of the Shadow, said: “Today’s inflation figures mean more pain for family finances – and it is thanks to the Handwritten Tax increases and increases inflation remuneration. “
With additional george parker reports in London
