Rising fuel costs push United Kingdom inflation higher

UK inflation hits highest level since June 2014 as fuel costs soar

The pickup in prices, which also reflected higher retailer and wholesaler margins, is the latest signal that broader inflation continues to move toward the goal of Federal Reserve policy makers. Sales patterns may have contributed to this, as the proportion of items on sale increased by more between December 2016 and January 2017 than it did a year ago, ONS said.

Prices in wholesale markets rose 5.25 percent last month from a year earlier, their fastest gain since July 2014, government data on Tuesday.

Pulse inflation moderated to 6.21 per cent, from 18.12 per cent in December.

But this might be the end of the cooling cycle for inflation.

"Going ahead, non-food components would tend to be upward moving". Even excluding the more volatile categories of food and energy, prices were still up by nearly as much at 2.3 percent.

The Reuters poll of 26 economists estimated the inflation to be slowed to 3.22% in January, which would be the lowest in the index's five-year history.




Crisil, while commenting on the CPI figures released on Monday, also said that retail inflation could see upside pressures hereon. "In the construction sector, the inflation has been driven by weak British pound affecting the price of imported materials". It was the largest year-over-year gain in 11 years. "The base effect too would have been exhausted by this time".

Overall food prices were flat between December and January after falling 0.6 per cent a year ago, as the sharp drop in grocery costs - triggered by the supermarket price war - ground to a halt.

However, Nossek does not expect inflation to reach much higher than 2 per cent as he believes the oil price lacks momentum - despite production cuts from Opec and non-Opec nations.

Reacting to the rise in the WPI inflation, rating agency CARE said " As expected, the WPI inflation witnessed an increase owing to an increase in fuel and power prices.

An economist from Icra, however said that fuels are unlikely to put extra pressure on retail inflation in the near term.

Segment-wise, price of high-speed diesel rose by 31.10 per cent last month, while that for gasoline or petrol climbed by 15.66 per cent and for LPG by 1.52 per cent.

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