Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Inflation dips to 3% as indicators suggest peak passed

Inflation dips to 3% as indicators suggest peak passed

Consumer price inflation dipped from 3.1% to 3% in December as a series of major contributory factors appeared to reinforce initial hopes that the effect of 2016’s sterling slump were falling away.

While the headline drop was in line with consensus, the decline in ‘core’ CPI - which strips away the most volatile elements - from 2.7% to 2.5% was lower than the median forecast of 2.6%.

The month-on-month fall was primarily due to a near-halving of air-fare inflation, from 0.29% to 0.16%.

But other currency-sensitive measures, such as food and core goods, suggested that the impact of a 20% devaluation in sterling over the year to November 2016 was beginning to retreat.

The rate of food inflation fell from 4.1% to 3.9% while core goods inflation held steady at 2.5%, down from a recent peak of 2.8% in August.     

‘Services inflation excluding airline fares as well as education and rents—which are influenced by government policies—fell to 2.8% in December from 3.2% in November, well below the 3.7% average of the 1997-to-2007 period,’ said Samuel Tombs of analyst Pantheon Macroeconomics.  

‘The continued weakness of underlying price pressures means that the [Bank of England’s] monetary policy committee has little need to rush the next rate hike.’

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 Hugh Young: the buck stops with me on Asia recovery

Hugh Young: the buck stops with me on Asia recovery

The Veteran Asia Pacific fund manager discusses how he is going to improve the performance of Aberdeen Standard Asia Focus and the other investment trusts run by his team.

Play Tim Steer: fund managers will have to get 'stuck in'

Tim Steer: fund managers will have to get 'stuck in'

The second part of our film with former Artemis and New Star fund manager Tim Steer looks at how his profession has evolved over the past two decades.

2 Comments Play Tim Steer: how to spot a stock disaster coming

Tim Steer: how to spot a stock disaster coming

The former Citywire AAA-rated fund manager has written a book on 22 stock disasters and how forensic examination of annual reports could have spotted them coming.

Read More
Your Business: Cover Star Club

Profile: 'Growing pains' - inside a boutique profit battle

2 Comments Profile: 'Growing pains' - inside a boutique profit battle

South London-based Fowler Drew has moved back into the black after spending a couple of years in the red

Wealth Manager on Twitter