Connect with us

Hi, what are you looking for?

Top Stories

Investing

UK inflation falls from six-month high, coronavirus to trigger slide

imageEconomy1 hour ago (Mar 25, 2020 07:11AM ET)

(C) Reuters. People are seen at the fruit and vegetable aisle in Sainsbury’s supermarket

By David Milliken

LONDON (Reuters) – British inflation fell in February, before the coronavirus crisis hit the country, and economists predict a further sharp fall in the next couple of months due to the collapse in global oil prices caused by the pandemic.

Consumer price inflation fell to 1.7% in February from a six-month high of 1.8% in January, the Office for National Statistics said, in line with forecasts in a Reuters poll.

The decline reflected falls in the cost of fuel and often-volatile video game prices.

Since last month, the price of oil has halved in U.S. dollar terms to below $28 a barrel, and economists expect the downward impact of this on British inflation will comfortably outweigh a sharp fall in sterling to near a 35-year low against the dollar.

“CPI inflation looks set to decline sharply over the coming months and to fall comfortably below 1% in the summer,” Samuel Tombs of Pantheon Macroeconomics said.

Further downward pressure would come from a cap on household energy bills, a slump in demand for travel and the recent closure of non-essential shops, restaurants and recreation venues, he said.

“Prices in these sectors will remain frozen at their pre-virus levels for as long as the government’s shutdown lasts.”

Economists at Morgan Stanley (NYSE:MS) said on Tuesday the British economy would contract by about 10% in the April-June period due to the government’s shutdown, which it ordered to slow the spread of coronavirus, which has so far killed 422 people in Britain.

Inflation is already well below the Bank of England’s 2% target, after striking its lowest in more than three years in December at 1.3%, and there was little immediate market reaction to the data on Wednesday.

The BoE has cut interest rates to a record low of 0.1% and ramped up its bond-buying program to help cushion the hit to the economy from coronavirus.

Retail price inflation, an older, less accurate measure still used for inflation-linked government bonds and some commercial contracts, fell to 2.5% from 2.7% in January.

Producer output price inflation – a measure which can give a guide to incoming inflation pressures – slowed more than expected to 0.4% in February from 1.0% in January.

UK inflation falls from six-month high, coronavirus to trigger slide

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Top News

Nikola, an electric truck startup, saw its stock price fly high as it went public and announced a deal with General Motors. A damning...

Stock

Stock Markets8 minutes ago (Jul 31, 2020 07:50PM ET) (C) Reuters. FILE PHOTO: James Murdoch, the son of media mogul Rupert Murdoch, and his...

Editor's Pick

TikTok is one of the most rapidly growing platform. People across all the spectrum of age, gender, communities are joining the platform to...

Top News

SEC probing Nikola Motors over short-seller claims of fraud – Business Insider Business Insider logoThe words “Business Insider”. 2020-09-14T23:20:04Z Massimo Pinca/Reuters The Securities and...

Disclaimer: SecretsOfRichDads.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 Secrets Of Richdads. All Rights Reserved.

    Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!