United Kingdom consumer price inflation slowed down in February 2018

British Pound Today: UK Inflation Data and Bank of England in Focus for Sterling

"Savers who have held their money in a United Kingdom bank account since then have seen their savings grow at a paltry 4% in total, which is dwarfed by the 30% increase in inflation over the same period".

Governor Mark Carney has already warned borrowers that rates will need to rise "somewhat earlier and by a somewhat greater degree" to get inflation back to the Bank's 2% target after stronger-than-expected economic growth.

The UK consumer price inflation slowed down in February 2018, following the dropping oil prices and slower food expenditure growth.

On average, prices increased by 0.8% between January 2018 and February 2018, Statistics SA announced on Tuesday.

Sterling was quoted 0.23% higher at 1.4056 against the US Dollar during morning trading ahead of the release Tuesday, while the Pound-to-Euro rate was up 0.11% at 1.1381. The central bank has signalled that it wants to see wage pressures building before it hikes rates.




The move in inflation came largely in response to the double digit referendum-induced devaluation of Sterling, which raised the cost of imported goods for companies and consumers.

The outcome was lower than the 2.8% predicted by economists and marked the first fall in inflation since December 2017.

Viraj Patel, an analyst at ING, said United Kingdom core inflation of 2.5 percent was "high and sticky enough" to warrant the Bank of England's inflation-driven tightening bias.

The Bank is expected to keep interest rates on hold at 0.5% on Thursday, but the meeting will be watched closely amid expectations over another hike in May.

Paul Hollingsworth of Capital Economics does not believe that this lower than expected figure will put the MPC off an interest rate hike this May.

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