Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

CPI falls below target for first time since 2009

CPI falls below target for first time since 2009

Consumer Price Inflation fell below the Bank of England’s 2% target for the first time since 2009 in January, continuing its sustained fall to hit 1.9%, from 2% at the end of 2013.

Chris Williams, chief economist at Markit, said he believed that the pace of inflation would remain reasonably steady over the next year, taking some pressure off rate expectations.

‘But beyond that the outlook is more uncertain, reflecting uncertainties about the ability for wage growth to revive, energy prices and the exchange rate,’ said Williams.

January was the fifth consecutive month of moderating CPI. The total appeared to have been dragged downward by core inflation in a reflection of deeper than usual January discounting.

Capital Economics pointed to a continued lack of pressure in commodity pricing and political heat over fuel prices as suggesting the potential for continued disinflation over the next few months.

Output pricing inflation also slid, falling from 1% to 0.9% in January, suggesting lower pressure along the supply chain.

‘There is a good chance that CPI inflation will fall to as low as 1% by the end of this year and remain subdued thereafter,’ said Samuel Tombs, UK economist at Capital Economics.

‘This should enable real earnings to rise for the first year since 2007 and allow the MPC to keep interest rates on hold until well into next year.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Video special: what Scottish DFMs think of SNP election flop

Video special: what Scottish DFMs think of SNP election flop

As delegates gathered for Citywire Scotland, we asked them their take on the election.

Play Keith Skeoch: 'passive has a part to play'

Keith Skeoch: 'passive has a part to play'

In the third part our series, Skeoch outlines his vision for Standard Aberdeen.

2 Comments Play Keith Skeoch: why I believe markets will make 'substantial returns'

Keith Skeoch: why I believe markets will make 'substantial returns'

In an exclusive interview, Standard Life CEO Keith Skeoch tells us why he takes an optimistic view on markets just about everywhere.

Read More
Your Business: Cover Star Club

Profile: Rathbones' fund boss on spotting emerging talent

1 Comment Profile: Rathbones' fund boss on spotting emerging talent

A great fund manager is really easy to spot, says Mike Webb, chief executive of Rathbones Unit Trust Management

Wealth Manager on Twitter