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 Liontrust ESG head says sustainable investment doesn't mean low return

Liontrust ESG head says sustainable investment doesn't mean low return

Peter Michaelis talks about ethical investment growth and where he sees future opportunites.

Play Are platforms the biggest barrier to wealth manager ETF take-up?

Are platforms the biggest barrier to wealth manager ETF take-up?

Citywire hosted a roundtable discussion to find out how and if wealth managers are using ETFs in their clients' portfolios and the challenges they face trading through different platforms.

Play SVM's Veitch on what's next for banks

SVM's Veitch on what's next for banks

SVM fund manager Neil Veitch is finding value in what he describes as unstable financials and talks through his favourite small caps.

Read More
Your Business: Cover Star Club

Profile: UBS' robo boss on what his tween can teach the industry

Profile: UBS' robo boss on what his tween can teach the industry

Co-head of UBS SmartWealth Shane Williams explains the simple life lessons missed by the first wave of robo pioneers

Wealth Manager on Twitter