British inflation rate falls more than expected to 10.1%

By: News Team

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British inflation rate falls more than expected to 10.1%

Britain’s consumer price inflation fell more than expected in January to 10.1 percent from 10.5 percent in December, also causing declines in core measures of inflation that the Bank of England is closely watching, official data showed on Wednesday.

Economists polled by Reuters had forecast that the annual rate of the consumer price index (CPI) would fall to 10.3% in January, a level that is far from the 41-year high reached in October (11.1%), but which still continues to erode household living standards.

Core CPI — which excludes energy, food, alcohol and tobacco — fell to 5.8 percent in January from 6.3 percent in December, Britain’s Office for National Statistics reported on Wednesday.

Sterling fell against the US dollar and euro after the data was released.

Earlier this month, the Bank of England said it saw signs that rising consumer prices had taken a turn, suggesting it was close to ending its streak of interest rate hikes.

Investors expect the Bank of England to raise borrowing costs again next month, but Wednesday’s data may reinforce the feeling that bank rates are not long away.

Services prices, which are also in the sights of the Bank of England, slowed their rise in January, with an annual increase of 6.0% compared to 6.8% in December.

“While any decline in inflation is welcome, the fight is far from over,” British Chancellor of the Exchequer Jeremy Hunt said.

“High inflation stifles growth and makes households and businesses suffer. That’s why we must stick to the plan to cut inflation in half this year, reduce debt and grow the economy.”

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