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UK CommentConsumer price inflation fell as expected in December

  1. CPI and core CPI of 2.1% and 1.9% respectively
  2. Inflation just above the 2% target
  3. Bank of England on the sidelines
CPI and core CPI of 2.1% and 1.9% respectively
UK consumer price inflation fell to 2.1% in December, from 2.3% in November, as expected. Core inflation rose to 1.9%, from 1.8% in November, which was somewhat higher than expected. Petrol prices and air fares pulled the inflation rate down, while accommodation services contributed upward. The sterling effect on CPI still signals that CPI inflation should continue to fall ahead. Additional downward pressure comes from falling producer price inflation and lower oil prices.
Bank of England on the sidelines
The Brexit deadline, March 29, is edging closer but an agreement is still not in place. Brexit uncertainty will keep the Bank of England on the sidelines; we expect no further rate hikes throughout our forecast horizon.


Sources: Macrobond

, Bloomberg

Sources: Macrobond, Bloomberg


Sources: Macrobond, Bloomberg


Kiran Sakaria

Junior Strategist

Foreign Exchange and Fixed Income

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