- Prior +3.0%
- Core CPI +3.2% vs +3.1% y/y expected
- Prior +3.1%
To preface the report, it is one that doesn’t matter all too much since it is before the US-Iran conflict took place. Still, it does provide a bit of backdrop of what kind of benchmark UK inflation is sitting at before the spike in energy prices.
Core annual inflation remains sticky above 3% with services inflation continuing to be a pain point. That despite it easing from 4.4% to 4.3% in February.
Looking at the monthly breakdown, the biggest contributor to inflation in February came from clothing and footwear prices. That was seen up 0.6% on the month with ONS noting that “prices normally rise in February as the spring product ranges start to enter the shops following the new year sales period”.
Besides that, there’s not too much else to note here as we now have to just wait and see what the US-Iran conflict has done to energy developments and its overall impact to prices globally. The UK will definitely feel the impact of higher prices in the months ahead. So, be on the lookout for that as said sentiment has already shifted the BOE outlook.
As things stand, traders are pricing in nearly three 25 bps rate hikes by the central bank by year-end now. The odds of a rate hike in April are at ~86% as of yesterday.
This article was written by Justin Low at investinglive.com.
