Britain’s annual inflation rate remained at 3.0% in January, holding near to a six-year peak, official data showed on Tuesday.
The news comes less than one week after the Bank of England warned that it could lift interest rates more quickly than expected to help bring down inflation.
“The consumer prices index (CPI) 12-month rate was 3.0% in January 2018, unchanged from December 2017,” the Office for National Statistics said in a statement.
The rate had hit 3.1% in November, which was the highest level in almost six years.
Analysts had expected the January reading to show a slightly slower rate of inflation of 2.9%. The Office for National Statistics said that smaller increases in food prices were offset by a pick-up in prices for recreation and culture.
“UK inflation came in higher than expected in January, adding further pressure for (Bank of England) policy makers to hike interest rates again, possibly as soon as May,” said IHS Markit economist Christopher Williamson.
“However, with mounting signs of economic growth slowing at the start of 2018, a May rate rise is by no means a done deal and will likely be dependent on the data flow improving in coming months.” Inflation jumped in 2017 and remains at an elevated level after Britain voted to leave the EU in 2016.
The Brexit referendum pushed down the pound, in turn hiking the cost of imported goods.
As a result, the Bank of England raised its main interest rate in November 2017 for the first time in a decade. However, it chose to keep the rate at 0.50% in both December and January.
AFP