In February, British inflation turned to be weaker than anticipated because the impact of the 2016 Brexit vote vanished, relieving some of the squeeze on British households’ spending power, although doing little to alter bets on a BoE rate lift in May.
According to official data, consumer prices inched up by 2.7% the previous month, which is the weakest ascend since July of 2017 and down from a 3% soar in January.
The figure happened to be below the median estimate of 2.8% in a Reuters survey of market experts.
Market participants told that the softening of inflation won’t probably challenge the BoE’s message from February that interest rates will most likely require going up more rapidly than it had previously anticipated.
British inflation has managed to surpass what’s observed in France and Germany. What’s more – it’s even higher than in America, where the Fed seems set to proceed with its series of interest rate lifts this week.
The UK currency headed south after the report, although held on to most of its 1% rally from Monday, when the United Kingdom had a Brexit transition deal secured from the European Commission. The BoE considers this fact to be another reason to lift rates in May.
By the way, Tuesday’s report also dropped a hint at less pressure on consumer prices.
Moreover, British manufacturers ramped up the prices they charged since November 2016 because the cost of their raw materials, mostly imported inched up 3.4%. That’s way down from a maximum annual jump of approximately 20% in January 2017.
In the United Kingdom inflation headed north to 3.1% in November, underpinned by voters’ June 2016 revolutionary decision to break up with the European Union that hammered the value of the UK currency and made imports less affordable.