UK January Inflation Rate at 2-Year Low of 1.8%


The annual inflation rate in the United Kingdom fell to 1.8 percent in January 2019 from 2.1 percent in the previous month and below market expectations of 1.9 percent. It was the lowest inflation rate since January 2017, mostly due to a slowdown in cost of electricity, gas and other fuels.

Year-on-year, prices eased for transport (3.2 percent compared to 3.4 percent in December), namely fuels and lubricants (0.7 percent compared to 3.4 percent) and purchase of vehicles (3.5 percent compared to 3.8 percent); housing, water, electricity, gas and other fuels (1.1 percent compared to 2.8 percent); and restaurants and hotels (2.6 percent compared to 3.1 percent). Additionally, cost of clothing and footwear declined further (-1.3 percent compared to -0.9 percent). On the other hand, prices increased at a faster pace for food and non-alcoholic beverages (0.9 percent compared to 0.7 percent); recreation and culture (2.9 percent compared to 2.8 percent); miscellaneous goods and services (0.2 percent compared to 0.1 percent) and furniture, household equipment and maintenance (1.0 percent compared to 0.4 percent). 

The consumer prices index including owner occupiers’ housing costs (CPIH) rose by 1.8 percent in January, slowing from a 2.0 percent gain in December.

The annual core inflation rate, which excludes prices of energy, food, alcohol and tobacco, went up by 1.9 percent, unchanged from the prior month and in line with market consensus.

On a monthly basis, consumer prices dropped 0.8 percent, after increasing 0.2 percent in the previous month and compared with market forecasts of a 0.7 percent fall. It was the biggest decline in monthly inflation rate since January 2016, as prices went down for transport (-1.2 percent compared to 0.8 percent in December); and furniture and household equipment (-2.1 percent compared to 1.1 percent). Also, cost of food and non-alcoholic beverages slowed (0.1 percent compared to 0.9 percent) and prices of clothing and footwear fell further (-4.3 percent compared to -1.0 percent).

 UK January Inflation Rate at 2-Year Low of 1.8%


ONS | Stefanie Moya | stefanie.moya@tradingeconomics.com
2/13/2019 9:49:56 AM