UK inflation rate falls to 3.4%
Breaking news: UK inflation has fallen to its lowest level in two and a half years.
The consumer price index in February was 3.4%, slowing from 4% in January, indicating that the rate of increase in prices last month has slowed.
This is the lowest level since September 2021, according to data from the Office for National Statistics, and a slightly bigger drop than the city had expected.
For one year until February 2024:
▪️The Consumer Price Index, which includes owner-occupied housing costs (CPIH), rose 3.8%, down from 4.2% in January.
▪️Consumer Price Index (CPI) rose 3.4%, down from 4.0% in January.
➡️ https://t.co/ObDycx6pDz pic.twitter.com/f9fuw78dFR
— Office for National Statistics (ONS) (@ONS) March 20, 2024
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For one year until February 2024:
▪️The Consumer Price Index, which includes owner-occupied housing costs (CPIH), rose 3.8%, down from 4.2% in January.
▪️Consumer Price Index (CPI) rose 3.4%, down from 4.0% in January.➡️ https://t.co/ObDycx6pDz pic.twitter.com/f9fuw78dFR
— Office for National Statistics (ONS) (@ONS) March 20, 2024
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Today’s inflation report shows that prices for food and non-alcoholic beverages rose by 5.0% in the year to February 2024, down from 6.9% in January.
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The February figure is the lowest annual rate since January 2022.
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The ONS reports that the annual rates for most types of food product eased between January and February 2024, with the largest effect coming from bread and cereals.
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It says:
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Overall, prices for bread and cereals rose by 0.3% on the month, compared with a rise of 2.3% between January and February 2023. Prices of packs of cakes and some bread products (for example, white sliced loaves) fell between January and February this year but rose a year ago. The resulting annual rate for bread and cereals in February 2024 was 6.0%, the lowest observed since March 2022.
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Other smaller downward effects came from classes such as meat, vegetables, and milk, cheese and eggs. Overall, the annual rate eased in 10 of the 11 food and non-alcoholic beverages classes with oils and fats the exception; its annual rate rising from 8.0% in January to 8.3% in February 2024.
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showing food inflation in the UK”,”caption”:”Graph showing food inflation in the UK”,”credit”:”Photo: ONS”}}],” attributes” :{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1710918250000,”blockCreatedOnDisplay”:”03.04 EDT”,”blockLastUpdated”:1710918626000,”blockLastUpdatedDisplay”:”03.10 EDT” ,”blockFirstPublished”:1710918626000,”blockFirstPublishedDisplay”:”03.10 EDT”,”blockFirstPublishedDisplayNoTimezone”:”03.10″,”title”:”Food inflation at lowest since January 2022″,”contributors”:[],”primaryDateLine”:”Wednesday 20 March 2024 03.12 EDT”,”SecondaryDateLine”:”First published Wednesday 20 March 2024 02.33 EDT”},{“id”:”65fa8b968f08ad8b604bd45e”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”
Underlying inflation also eased in February.
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Core CPI (which excludes energy, food, alcohol and tobacco) rose by 4.5% in the 12 months to February 2024, down from 5.1% in January.
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Goods inflation slowed from 1.8% to 1.1%, while the CPI services annual rate eased from 6.5% to 6.1%.
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Newsflash: UK inflation has fallen to its lowest level in two and a half years.
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The Consumer Price Index has slowed to 3.4% in February, down from January’s 4%, a sign that prices rose at a slower rate last month.
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That’s the lowest since September 2021, and a slightly larger fall than the City expected, data from the Office for National Statistics shows.
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In the year to February 2024:
▪️ Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3.8%, down from 4.2% in January.
▪️ Consumer Prices Index (CPI) rose by 3.4%, down from 4.0% in January.➡️ https://t.co/ObDycx6pDz pic.twitter.com/f9fuw78dFR
— Office for National Statistics (ONS) (@ONS) March 20, 2024
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Good morning.
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Eyes in the City of London, and Westminster, are on UK inflation, with the latest cost of living data due at 7am this morning.
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Inflation is expected to have slowed last month; economists estimate the Consumer Price Index (CPI) will drop to 3.5% for February.
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That would be the lowest in almost two-and-a-half years (since September 2021), and mean prices are rising at a slower rate than January, when annual inflation was 4%.
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A drop in inflation could encourage the Bank of England to consider cutting interest rates in the coming months – as its mandate is to keep inflation sustainably at 2%.
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Kyle Rodda, senior financial market analyst at capital.com, explains:
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UK inflation data will be a precursor to tomorrow’s Bank of England meeting, with forecasters projecting a meaningful drop in prices last month.
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Core inflation is expected to moderate to 4.6% from 5.1% in February, while headline is tipped to decline to 3.5% from 4%. Inflation in the UK has been more stubborn than other G10 economies, partly due to elevated wage growth and energy price shocks.
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The dynamic means the markets are pricing in relatively fewer cuts from the Bank of England than other major central banks.
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The government will also be hoping for a substantial drop in inflation, as it would bolster Rishi Sunak’s claim that “the economy is turning a corner”, after it fell into recession at the end of last year.
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The agenda
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7am GMT: UK inflation report for February
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9.30am GMT: UK house price and rental index for January
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10.15am GMT: UK bank bosses to face questions from Treasury Committe
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11am GMT: US mortgage applications data
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3pm GMT: Eurozone consumer confidence report
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6pm GMT: US Federal Reserve sets interest rates
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important events
Food inflation is lowest since January 2022
The ONS said the largest downward contribution to the monthly change in inflation came from food and restaurants and cafes.
Today’s inflation report showed food and non-alcoholic beverage prices rose 5.0% in the year to February 2024, slowing from a 6.9% rise in January.
February’s figure is the lowest annual rate since January 2022.
The ONS report said annual rates for most food categories eased from January to February 2024, with bread and cereals being the most affected.
It is written like this.
Overall, bread and cereal prices increased by 0.3% in the month, compared to a 2.3% increase between January and February 2023. Prices for cake packs and some bread products (such as white sliced bread) fell between January and February. It went up this year, but it went up a year ago. As a result, the annual interest rate for bread and cereals in February 2024 was 6.0%, the lowest level since March 2022.
Other smaller downward impacts came from items such as meat, vegetables, milk, cheese, and eggs. Overall, 10 of the 11 classes of food and non-alcoholic beverages experienced annual percentage declines, with the exception of fats and oils. His annual rate will rise from 8.0% in January to 8.3% in February 2024.
Core inflation rate also declines
Underlying inflation also eased in February.
Core CPI (excluding energy, food, alcohol and tobacco) for the 12 months to February 2024 rose 4.5%, down from 5.1% in January.
Goods inflation slowed to 1.1% from 1.8%, while the annual rate of CPI services fell to 6.1% from 6.5%.
The National Statistics Office reported that the inflation rate in February 2024 rose by 0.6% on a monthly basis.
This is considerably slower than the 1.1% price increase recorded in February 2023.
UK inflation rate falls to 3.4%
Breaking news: UK inflation has fallen to its lowest level in two and a half years.
The consumer price index in February was 3.4%, slowing from 4% in January, indicating that the rate of increase in prices last month has slowed.
This is the lowest level since September 2021, according to data from the Office for National Statistics, and a slightly bigger drop than the city had expected.
For one year until February 2024:
▪️The consumer price index, which includes owner-occupied housing costs (CPIH), rose 3.8%, down from 4.2% in January.
▪️Consumer Price Index (CPI) rose 3.4%, down from 4.0% in January.
➡️ https://t.co/ObDycx6pDz pic.twitter.com/f9fuw78dFR
— Office for National Statistics (ONS) (@ONS) March 20, 2024
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For one year until February 2024:
▪️The consumer price index, which includes owner-occupied housing costs (CPIH), rose 3.8%, down from 4.2% in January.
▪️Consumer Price Index (CPI) rose 3.4%, down from 4.0% in January.➡️ https://t.co/ObDycx6pDz pic.twitter.com/f9fuw78dFR
— Office for National Statistics (ONS) (@ONS) March 20, 2024
German bank’s Britain’s chief economist sanjay rajaa significant drop in inflation is also expected this morning.
raja I told my client:
Headline and core inflation are expected to continue declining.
Lower prices for food, goods, and some services, combined with a large negative base effect, will result in a sharp decline in inflation in February.
The headline CPI is expected to slow to 3.4% year-on-year (4% in January). Core CPI is expected to decline to 4.5% year-on-year (5.1% in January).
These “base effects” are the price hikes a year ago that pushed inflation above 10% in February 2023.
economist Ellie henderson of investec We expect inflation to fall sharply in February as last year’s large increases in prices for non-alcoholic drinks, clothing and footwear were not repeated this year.
However, she points out that there are still inflationary pressures as fuel prices rose last month.
henderson addition:
“There is also a risk that the Red Sea disruption may have increased input costs for producers in February, some of which may have been passed on to consumers.
“Additional health certificate requirements introduced earlier this month for medium- and high-risk plant and meat imports from the EU may also have caused a significant increase in consumer prices.”
Introduction: UK inflation report coming soon
good morning.
All eyes are on UK inflation in the City of London and Westminster, with the latest cost of living data due to be released at 7am this morning.
Inflation is expected to slow last month. Economists expect the consumer price index (CPI) to fall to 3.5% in February.
This is the lowest level in almost two and a half years (since September 2021) and means prices are rising less than in January, when annual inflation was 4%.
The decline in inflation could mean that the Bank of England may consider cutting interest rates in the coming months, as it is the Bank of England’s responsibility to keep inflation sustainably at 2%.
Kyle Rodda Senior Financial Market Analyst capital.com, I will explain:
UK inflation figures bode well for tomorrow’s Bank of England meeting, with forecasters expecting a big fall in prices last month.
Core inflation is expected to slow to 4.6% from 5.1% in February, while the headline index is expected to fall to 3.5% from 4%. Inflation in the UK has been more robust than in other G10 countries, due in part to higher wage growth and energy price shocks.
This move means that markets are pricing in relatively few interest rate cuts from the Bank of England compared to other major central banks.
The government would also expect a significant drop in inflation to encourage inflation. Rishi Sunak’s After falling into recession at the end of last year, he insists that the economy is “turning the corner.”
agenda
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7am GMT: UK Inflation Report for February
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9:30am (GMT): UK house prices and rental index for January
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10.15am (GMT): Top UK banks face questions from Treasury Committee
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11am GMT: US mortgage application data
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3pm GMT: Eurozone Consumer Confidence Report
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6pm GMT: US Federal Reserve sets interest rates
