On a year-on-year basis, the data pointed to stability in inflation, contrary to expectations indicating a rise. However, the Bank of England is concerned about possible wage hikes.
Inflation in the United Kingdom was 4.0% in January, below analysts' forecasts, which pointed to an increase.
Data released by the Office for National Statistics indicated better numbers than economists consulted by Reuters had expected. The annual inflation rate was expected to increase to 4.2%.
Excluding the prices of food, energy, alcohol and tobacco, inflation was also unchanged, rising 5.1% compared to January 2023.
Bank of England (BoE) Governor Andrew Bailey is expected to release statements at 3pm in which he could provide data on the likelihood of the central bank cutting interest rates in 2024.
For now, the BoE is sure to be wary of future wage hikes. In this case, there should be a tendency to increase demand in various sectors of the British economy, which should put pressure on inflationary trends.
