UK inflation slowed to the lowest in 14 months in January as the impact of a sales-tax increase a year earlier faded and consumer demand weakened, according to GulfNews citing Bloomberg.
Consumer prices rose an annual 3.6 per cent after a 4.2 per cent gain in December, the Office for National Statistics said. That matched the median forecast of 36 economists surveyed by Bloomberg News.
The inflation rate will still require Bank of England governor Mervyn King to write a letter to Chancellor of the Exchequer George Osborne.
King will release new economic growth and inflation projections at a press conference in London today after policymakers said last week they will pump another £50 billion into the economy.
Moody’s Investors Service said it may strip the UK of its top rating, citing Europe’s debt crisis.
The figure “vindicates the Bank of England’s expectations for inflation,” said Alan Clarke, an economist at Scotia Capital in London. “It will continue to decelerate toward the central bank’s 2 per cent target. They’ve got to justify that they’ve just delivered an extra £50 billion.” The pound extended its decline against the dollar after the data were published. It traded at $1.5715 in early trading in London, down 0.3 per cent from yesterday.
The largest downward effect on the 12-month inflation rate in January was from petrol, restaurants, and beverages, the statistics office said.
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